Crypto-assets on SEC’s 2023 to-do list

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The Securities and Exchange Commission’s examination division has named “cryptoassets” and other emerging technologies a top priority for this year.

“The division will conduct reviews of brokers and RIAs that use emerging financial technologies or employ new practices, including technology and online solutions to meet compliance and marketing requirements and to service investor accounts,” the SEC said in the division’s public to-do list.

These reviews will focus on whether companies dealing with digital assets “have complied with and followed their respective standards of care when making investment recommendations, recommendations or advice”, as well as whether they continuously review their own compliance, disclosure and risk management practices.

The reviews division will also work to ensure that investment advisers have complied with a new marketing rule put in place by the commission last year, which limits the use of testimonials and endorsements in promotion. investments. The SEC has pursued high-profile cases related to celebrity endorsements of digital assets.

Other agenda items that could apply to companies dealing with digital assets include reviews of the performance of fiduciary duty by investment advisers and a review of cybersecurity practices by brokers, advisers in placement and other registrants. The fiduciary element will understand if they assess risks correctly, how they perform the safekeeping of assets and how advisors manage conflicts of interest.

“In an era of growing markets, changing technologies and new forms of risk, our review division continues to protect investors,” SEC Chairman Gary Gensler said in a statement. “By executing the 2023 priorities, the division will help ensure compliance with federal securities laws and rules.”

© 2023 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended for use as legal, tax, investment, financial or other advice.

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