The crypto world is currently freaking out as usual over a set of recently stated new guidelines by the Securities and Exchange Commission that will require cryptocurrency exchanges to register with the SEC. The recent statement made by the SEC appears to further mark crptocurrencies as a security in many instances, and also cautions crypto investors to only do business with exchanges that are registered, as to avoid the potential for fraud.
In light of the recent updates from the SEO, the wider crypto markets dropped, with Bitcoin losing 10% after the news was first published. But crypto investors shouldn't freak out over the news, as the SEC and U.S government have so far not made any signal that they intend to stamp out cryptocurrencies in the same fashion some foreign nations already have.
Its true that tightened regulations that label crypto a security do put up more red tape for exchanges, but the added regulations by the SEC only appear to be intended to stamp out the rampant fraud seen with fake ICO's.
The SEC's biggest concern appears to be crypto-traders calling themselves an "Exchange", in which the SEC states creates confusion as some investors assume these are legally registered entities, when often they are not.
What isn't clearly being stated by the SEC are what those guidelines for exchanges will entail. Part of the concern with crypto investors appears to be centered upon the possible requirements of the SEC and other foreign government financial watch dogs to de-anonymize crypto's like Bitcoin. Many are concerned that requiring investors to disclose their personal information to exchanges could have a negative effect on market prices.
The SEC states that any platform that trades securities and operates as an exchange, must register as a national securities exchange, otherwise receive an exemption. That being said, even those who are given a pass for exemption will still technically be required to register initially.
Other issues that appear to be having an impact on the current crypto market and Bitcoin have to do with potential phishing attacks on certain exchanges, such as the one noted by Binance. Although, it appears the attack was caught quickly and the damage appears to be fairly minimal.
It's true that bad actors in the crypt space have have made every effort to capitalize on would be investors with bogus coin offerings, and other sham crypto investments. As an example, we've banned over 500+ users for posting potentially fake ICO related posts in our Bitcoin and Cryptocurrency community on Google+ in less than 2 months.
Some were removed for making outright advertisements, which violates our guidelines. Others were removed after reviewing the claims being made. Moving forward, we're now actively working to stamp out potential fraud by requiring the marketers of ICO's to disclose additional information to be reviewed by us before allowing them to further promote their crypto related products and services.
More info from the SEC itself: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets
More news from CNBC: Bitcoin just tanked below $10,000 after SEC says crypto exchanges must register with agency
Written and published by Daniel Imbellino.
You can check out my Crypto community here: https://plus.google.com/u/0/communities/116312962316485325190