Breaking: SEC Issues Statement For Digital Asset Brokers Holding Security Tokens

Sunil Sharma Regulation News published December 23, 2020 | modified December 24, 2020

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Breaking: SEC Issues Statement For Digital Asset Brokers Holding Security Tokens

SEC in latest press release has provided five more years to digital asset brokers holding custody of security tokens who are following SECs guidelines. This press release comes as a breather for many digital asset and crypto brokers who were under fear due to SECs recent lawsuit on Ripple.

No Enforcement Actions For Digital Asset And Crypto Brokers Following SEC Guidelines

Cryptocurrency industry especially crypto brokers and exchanges are facing lot of heat in light of SECs recent $1.3 Billion lawsuit against Ripple. SEC published an official press release titled “SEC Issues Statement and Requests Comment Regarding the Custody of Digital Asset Securities by Special Purpose Broker-Dealers”.

SEC press release crypto brokers
Source: https://www.sec.gov/a/press-release/2020-340, SEC press release crypto brokers

The press release emphasizes the rules laid out in the Securities Exchange Act Rule 15c3-3 to digital asset securities and states that SEC aims to utilize it to foster innovation in the custody of digital asset securities. The press release states forth,

“for a period of five years, a broker-dealer operating under the circumstances set forth in the statement will not be subject to a Commission enforcement action. “

The commission also requested relevant businesses for comment and the statement will become effective 60 days after publication in federal register.

Why This Press Release Is Important?

Recently, Ripple company that owns 6.4 billion of XRP, previous third largest cryptocurrency by market cap was slapped by a massive 1.3 billion lawsuit for dealing in securities. SEC previously also has been very cautious with cryptocurrency businesses and has taken necessary actions for ex. ICO scams for 2017.

The crypto exchanges and brokers were in fear of SEC actions and analysts anticipated a wide delisting of XRP token. The XRP price already plummeted by more than 40% and resulted in delisting of coin from few exchanges.

This news will be breather for exchanges and brokers dealing in XRP which is being called security by SEC.

 

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Sunil Sharma 170 Articles
Sunil is a serial entrepreneur and has been working in blockchain and cryptocurrency space for 2 years now. Previously he co-founded Govt. of India supported startup InThinks and is currently Chief Editor at Coingape and CEO at SquadX, a fintech startup. He has published more than 100 articles on cryptocurrency and blockchain and has assisted a number of ICO's in their success. He has co-designed blockchain development industrial training and has hosted many interviews in past. Follow him on Twitter at @sharmasunil8114 and reach out to him at sunil (at) coingape.com
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