The SEC reminded operators of online digital platforms of their regulatory compliance requirements and encouraged investors to verify the safety of a platform before trading.
The SEC warned market participants operating online trading platforms that both national securities exchanges and alternative trading systems ("ATS") are subject to regulatory oversight. The SEC stated that an entity that wishes to operate as an ATS must become (i) an SEC-registered broker-dealer and (ii) a member of a self-regulatory organization. Such entities are subject to recordkeeping, reporting and various other responsibilities. The SEC encouraged market participants seeking to operate online trading platforms to consult legal counsel and contact SEC staff.
As to investors using online trading platforms, the SEC urged consideration of several questions to verify the safety of the platform before trading digital assets. The SEC raised questions concerning the reliability of data provided by such platforms, and warned that unregistered exchanges are not reviewed by the SEC and may not meet appropriate listing standards.
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