The SEC shows some mercy to broker dealers who handle security tokens

The U.S. Securities and Exchange Commission is listening.

At the very least, per an announcement on December 23, the SEC responds to long-standing industry complaints that no one knows who can handle security token trading.

The SEC is seeking comment on the matter and reaching out to the crypto industry. Perhaps most notably, the commission’s announcement will keep broker-dealers safe from enforcement for the next five years:

“In particular, the Commission’s view, which expires after a period of five years from the date of publication of this statement, is that a broker dealer operating in the circumstances set out in Section IV will not be subject to enforcement action. the Commission. “

The “circumstances” basically set boil down to keeping security tokens the main focus of the operation and doing due diligence in cyber security and disclosures to clients, including making all prospective customers aware that the broker-dealer involved handling a digital asset. guarantees.

Alongside the announcement, the SEC is seeking comment on a number of issues related to appropriate requirements for security token trading. One of the questions suggests that the commission is looking to let investors use security-free tokens such as Bitcoin and Ether to pay for security tokens: “Should this situation be expanded to include the use of unsecured digital assets like a way to pay for digital asset securities? “

A few weeks ago, several congressmen signed a letter to the SEC asking the commission for clarity on this exact issue. Those congressmen reiterated the chorus that has long been coming from the crypto industry: regulatory clarity.

The SEC’s hesitancy to issue large statements is understandable in some sense. It’s unlikely that a regulator is going to move as fast as a technology developer. As a result, many of the SEC’s most prominent movements have a fairly limited application, including a series of no-action letters for symbolic projects.

Despite long-term hopes that security tokens can upgrade the traditional equity markets, the industry is plagued with tile trading and low volumes.