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In a compliance notice issued Friday, examiners at the US government's top securities watchdog outlined their framework for vetting digital asset investments.
On their comprehensive list of focus areas, naming custody, record keeping, registration requirements and conflict of interest protocols, officials from the Examinations Division of the Securities and Exchange Commission (SEC) reminded mainstream financial players such as broker dealers and investment advisors to tread carefully when bringing digital asset products into the traditional financial world.
Nevertheless, the release, which did not appear to be targeted at any one event, comes as more and more U.S. companies grapple with how to manage their digital asset efforts without encouraging regulatory wrath.
MicroStrategy's ban on employees trading bitcoin (BTC, +2.12% ) ahead of potentially market-moving corporate buys is on one end of this spectrum. On the other hand, Tesla CEO Elon Musk expressed hope yesterday that rumors are true that the SEC is investigating his DOGE tweets (+0.52 percent), which tend to precede price jumps.
The notice was framed by the SEC examiners as a reminder of the novel risks associated with distributed ledger technologies and digital assets, and of market participants' responsibilities to hedge those risks with comprehensive compliance frameworks.
Many of their focus examination points are simply traditional bookkeeping practices reapplied to cryptocurrency investments. Other areas of examination, on the other hand, appear to be more novel. Examiners might look into what controls an investment firm has in place for access to private cryptographic keys, for example.
Source: Bityard (https://support.bityard.com/hc/en-us/articles/900004700686-Blockchain-News-Inspectors-from-the-Securities-and-Exchange-Commission-SEC-outline-the-crypto-examinations-playbook-in-a-Compliance-Notice-)