SEC Probes Cryptocurrency Staking: Retail Investors At Risk?
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The cryptocurrency world has been thrown into turmoil following rumors of a potential ban on cryptocurrency staking for retail investors by the United States Securities and Exchange Commission (SEC). The speculation was first made public by Brian Armstrong, the founder of Coinbase, the largest cryptocurrency exchange in the country, which recently started offering Ethereum staking to its users.
John Deaton, a prominent attorney, long-time advocate for cryptocurrencies, and critic of the SEC, has shared his thoughts on the increased scrutiny of the cryptocurrency industry. He asserts that the SEC is currently engaged in an all-out battle against the cryptocurrency business, and that its leader, Gary Gensler, shows no signs of slowing down.
What Is The SEC Upto Now?
Recently, the SEC has stepped up its involvement in the cryptocurrency sector. The agency is currently investigating allegations that the prominent cryptocurrency exchange, Kraken, violated securities laws and has initiated an inquiry into the matter.
Coinbase, founded by Brian Armstrong, is also being scrutinized as part of the investigation.
Starting this year, the SEC will have the power to regulate cryptocurrency brokers and financial advisors that offer or provide advice on cryptocurrencies. This marks a significant development in the regulatory landscape of the cryptocurrency industry.
Standards Of Care For Brokers & Advisors
This year, the SEC is focusing on ensuring that brokers and advisors adhere to the established standards of care when delivering investment recommendations, referrals, and financial advice.
The regulator is placing greater emphasis on the proper procedures and standards of care followed by brokers, rather than assessing the specific risks posed by the rapidly evolving financial technology landscape, which will be a key area of focus in 2022.
The SEC is also investigating registered investment advisors to determine if they are inappropriately certifying their employees to provide customers with digital asset custody services. This investigation has been ongoing for several months and is now a top priority following the recent failure of the cryptocurrency exchange FTX.
Filed under: Bitcoin - @ February 11, 2023 10:05 am