• SEC will continue strict inspection of crypto in 2020
  • OCIE adds fintech and digital assets to the priorities list

The US Securities and Exchange Commission (SEC) highlighted fintech and digital assets in its 2020 examination priorities as it continues examination of crypto. As per the report, the Office of Compliance Inspections and Examinations (OCIE) wants to keep a check on the risks associated with digital assets. The annual examination priorities are focused on applying an approach to promote compliance, prevent fraud, mitigate risks and inform policy.

The regulatory body aims to protect retail investors who lack a deep understanding of the digital assets as opposed to the traditional counterparts. Per the report, the examination will include evaluation of “investment suitability, portfolio management and trading practices, safety of client funds and assets, pricing and valuation, effectiveness of compliance programs and controls, and supervision of employee outside business activities”.

In its previous examination priorities, SEC was focused on ICOs and supervision of the protection of customers’ assets along with the assessment of risks. This year, the regulatory body will extend ITS supervision to ‘outside business activities’ of the employees, and any consequential conflicts arising from the same.

The document also reported examination of broker-dealers and transfer agents [intermediaries maintaining an investor’s financial records] to monitor how they develop blockchain tech and provide services to the issuers.

 

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