The pace of the SEC’s crypto crackdown ramped up last week with its highest profile actions against crypto trading platforms since the crypto market turmoil at the end of 2022. The SEC’s actions place crypto trading platforms and the market as a whole on extremely uncertain regulatory footing in the US, and the frustration from the industry is palpable.
On April 14, 2023, the Securities and Exchange Commission (“SEC”) reopened the comment period and provided supplemental information on proposed amendments to Rule 3b-16 under the Securities Exchange Act of 1934 (“Exchange Act”) which defines certain terms used in the definition of “exchange” in Section 3(a)(1) of the Exchange Act.
On 15 February 2023, the European Parliament adopted the regulatory reform of the European long-term investments funds (ELTIFs) regulation to make these ELTIFs more attractive to asset managers and retail investors by facilitating their investments in the real economy and encouraging private capital flows toward more environmentally sustainable investments.
On February 9, 2023, the SEC announced that it had settled charges against the world’s third largest centralized crypto exchange by volume for offering a crypto staking program that the SEC deemed to be the offering and selling of unregistered securities.
Following a host of notable bankruptcy filings in the digital asset industry, the New York State Department of Financial Services (DFS) recently issued guidance (the DFS Guidance) to emphasize sound custody and disclosure practices for firms providing digital asset custody services to better protect customers in the event of an insolvency or similar proceeding.
FINRA recently updated the industry on observations to date from its August 2021 sweep on broker-dealer practices and controls concerning the opening of options accounts and related issues (options account supervision, communications, and diligence).