On Wednesday, the Securities and Exchange Commission’s Division of Examinations revealed its annual examination priorities. Cryptocurrency is one of the top objectives in this year’s report.
“In this moment of increasing market volatility, our efforts have been tailored to focus on emerging concerns, such as crypto assets,” said an official from the SEC Division of Examinations.
SEC will evaluate broker-dealers and RIAs
The Securities and Exchange Commission (SEC) designated crypto assets as a high-risk area for market participants to investigate this year.
“Emerging technologies and crypto-assets” is one of the five “primary priority areas” highlighted in the Examination Priorities report. Norms of behavior, pension funds, environmental, social, and governance (ESG) investment Data security, and operational resiliency are two of the others.
The Division of Examinations oversees the SEC’s National Exam Program, which states on its website that its “mission is to protect investors, ensure market integrity, and enable responsible capital formation through risk-focused programs.”
The examination priorities, according to SEC Chairman Gary Gensler,” identify significant risk areas that registrants, such as investment advisers, broker-dealers, self-regulatory organizations, and clearing firms, must “address, manage, and mitigate with caution.”
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According to the SEC, “the Division will evaluate broker-dealers and RIAs [registered investment advisers] that are adopting novel financial technologies to see if the businesses recognized the special risks these activities pose when creating their regulatory compliance procedures.”
The securities regulator went on to say:
Market participants dealing in crypto assets will be monitored for their custody arrangements, as well as the offer, sale, suggestion, advice, and trading of such assets.
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