The Director of the U.S. Securities and Exchange Commission’s (SEC) Division of Investment Management has underscored the key questions relating to the filings for registered funds that would hold cryptocurrency.
While delivering the keynote address at the ICI Securities Law Developments Conference last week, Dalia Blass said that the SEC is thinking about new innovations in asset management.
“[W]e have seen several filings for registered funds that would hold cryptocurrency. As with any new product, there are questions to ask”, Blass said.
To that end, she listed some of the key questions that the agency will discuss when it will work through the filings. These questions revolve around the risks associated with cryptocurrencies, the different features of different blockchain offerings, and their compliance with existing regulatory set up.
“For example, would retail investors have sufficient information to consider these products and to understand the risks? When thinking about cryptocurrencies and other blockchain offerings as fund assets, are differences in their features important? How would these funds fit into the existing regulatory scheme? What regulatory structure or structures apply to the market for the underlying instrument? We will be discussing these questions with you as we work through these filings,” Blass added.
Earlier this year, the SEC published an investigative report which stated that "Initial Coin Offerings" or "Token Sales", which involves offers and sales of digital assets by virtual organisations using blockchain or distributed ledger technology (DLT), may be subject to the requirements of the federal securities laws.
