Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

A ‘token’ gift: The US SEC giveth and taketh away

Cryptocurrency Jan 26, 2021 04:00PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
A ‘token’ gift: The US SEC giveth and taketh away

On Dec. 23, 2020, the SEC published a statement proposing a framework for broker-dealers to custody digital asset securities in a manner consistent with Rule 15c3-3 under the Securities Exchange Act of 1934. Among other things, the statement, which will expire after a period of five years from publication, provides that a broker-dealer may custody digital asset securities so long as it operates consistent with the enumerated conditions set forth in the statement, including but not limited to, restricting its business exclusively to digital asset securities, instituting robust written policies and procedures, and ensuring that it has exclusive control over custodied digital asset securities.

It is important to emphasize that this statement only offers relief to broker-dealers that limit their activities exclusively to digital asset securities, with a focus on custody of such securities. In contrast to some misinformed industry reactions to the contrary, broker-dealers wishing to custody digital asset securities are categorically prohibited from custodying non-digital asset securities such as Bitcoin (BTC) — or for that matter engaging in any non-digital asset securities activity of any kind. Of course, while clearly not the motivating factor behind the SEC’s prohibition on non-securities digital asset business activity, a broker-dealer that is to engage in such activity would be subject to various state money transmitter licensing requirements.

Ethan Silver chairs Lowenstein Sandler’s fintech practice. His practice focuses on advising cryptocurrency, blockchain and digital asset businesses navigating federal and state regulatory frameworks. He also counsels cryptocurrency trading platforms, exchanges, custodians and related businesses with respect to federal securities laws and works with technology-focused broker-dealers and robo-advisors on formation, structuring and regulatory matters.
Will Brannan, counsel at Lowenstein Sandler, advises regulated financial technology companies navigating complex securities, derivatives and cryptocurrency regulatory issues. He also counsels cryptocurrency exchanges, custodians and securities trading platforms with respect to federal securities laws, FINRA rules, security-based swap rules, state money transmitter licensing requirements and the New York BitLicense.

Continue Reading on Coin Telegraph

A ‘token’ gift: The US SEC giveth and taketh away
 

Related Articles

#WeAreUkraine NFT Collection Launched For Ukraine
#WeAreUkraine NFT Collection Launched For Ukraine By DailyCoin - Aug 11, 2022

The newly formed DIG Foundation’s first philanthropic venture is #WeAreUkraine, an exclusive NFT collection to benefit Ukraine, launched in partnership with leading...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email