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SEC Sends Information Requests To Dozens Of US Brokerage Firms

In the past couple of weeks, the Securities and Exchange Commission (SEC) sent information requests to U.S. brokerage firms who are involved in cryptocurrency. This step was taken by the SEC to track misconduct that is increasing in the burgeoning market. Hence, this initiative of sending information requests to brokerage firms has taken the center stage in the agency’s scope of work.

The sweeping probe launched by the top U.S. securities regulator examines the brokers’ business practices and how they deal with their clients. It is also making a note of the fees that are generated by these brokerage firms from crypto trading, ICOs, and financing. The SEC in its request to the firms have sought information pertaining to the sales structure, details on personnel and advisors involved, marketing materials, clearing agreements, and more.

The SEC is concerned as in a lot of cases, the retail investors are not adequately educated about the kind of risks involved in the cryptocurrency investment products. The SEC chairman, Jay Clayton, recently described the ICO market as “rife with fraud”.

A Long List Of Actions Taken By SEC

Recently, the SEC took enforcement actions as well with a dozen companies putting their offerings on hold after being issued warnings from the agency. Apart from this, the agency also froze assets of several cryptocurrency firms, suspended trading in companies that claimed cryptocurrency or blockchain dealings, and halted ICOs, as per the Finance Magnates report.

Despite putting the crypto exchanges and their advisers on notice, the regulatory agency, SEC, has failed to dampen the spirits of the booming crypto market. The recent crackdown on the U.S. brokerage firms came just at the moment when these U.S. crypto operators were in a mad rush to create the country’s first regulated venues for tokens that are considered to be securities.

[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]
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Jesmine Rahman holds 15+ years of professional writing experience of working with reputed Indian dailies like the Times of India and the Indian Express. She also holds a rich experience of working as a Senior Technical Content Specialist with a reputed IT company. for 10 years. She writes crypto news on OWLT Market.

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