The SEC has increased its scrutiny of the crypto-sphere with an inquest into cryptocurrency brokerages.
It’s a well-known fact that the SEC is keeping a close eye on all things crypto, but the latest targets are brokers. according to Bloomberg, brokerages have been inundated with queries from examiners at the SEC about the practices and goings on within the brokerage business' as well as how they deal with clients.
According to an anonymous source, the SEC is specifically seeking information pertaining to fees generated from trading, financing and initial coin offerings, as well as details about investment advisors’ involvement.
While some regulators such as SEC chairman Jay Clayton have been quick to judge the crypto-space - especially the sometimes dubious ICO market, in which he is said to believe is fairly fraudulent; others such as Hester Peirce have come to its aid. Following the SEC dismissal of the Winklevoss ETF proposal, Hester weighed in by directly dissenting against the decision.
Apparently, bitcoin is not ripe enough, respectable enough, or regulated enough to be worthy of our markets. I dissent: https://t.co/gH5zXaKtmj— Hester Peirce (@HesterPeirce) July 26, 2018
This further scrutiny isn’t necessarily a bad thing, but can be seen rather as a necessary thing. These are the same checks and balances that the SEC would have to perform on any other typical financial institution. The fact that the SEC is looking to understand these firms better, rather than slap them with ill-fitting regulation drafted for brokers of old, is a wholly positive step, and indeed one the space needs, in order to evolve and mature.