Securities Exchange Commission (SEC) Sets Division Tasked With Cryptocurrency Sector Regulation

The U.S Securities and Exchange Commission has promoted, Valerie Szczepanik, to oversee the emerging cryptocurrency industry underscoring its recognition of the challenges posed by digital currencies. Szczepanik is to oversee a less renowned SEC unit but with huge responsibility given the billions of dollars streaming into the cryptocurrency sector.

SEC increased focus on the cryptocurrency sector stems from the widespread adoption of crypto assets which continues to pose significant risks given that the sector is not well regulated. Cases of fraud and scam in the sector, especially through Initial Coin Offerings, has left the watchdog with no option but to ramp up its operations in a bid of protecting normal investors.

The regulator has already blocked a Bitcoin exchange-traded product as part of its latest crackdown on products it feels pose significant risk. The SEC is not the only government agency to have ramped its effort in trying to regulate crypto assets. The Department of Justice, as well as the Commodities Future Trading Commission, have also set up units to oversee virtual coins.

Szczepanik is the latest high profile SEC official tasked with the responsibility of coordinating the agency’s operations on matters cryptocurrencies across all divisions. Top on the agenda will be to oversee Initial Coin Offerings that companies use to raise money by issuing digital tokens.

The agency is maintaining a keen interest on ICOs on concerns most of them at re being used to propagate Ponzi Schemes. The fact that ICOs continue draw in billions of dollars calls for increased regulation in a bid to protect investors.

SEC biggest frustration has to do with the fact that firms are not registering ICOs as they ought to something that Szczepanik hopes to change as she swings into action.

“We want people to come talk to us. When I’m in meetings with folks, I want them to see me as someone who’s interested in communication and back and forth, and looking to encourage innovation that helps investors and the markets,” Szczepanik in a statement.

Szczepanik with her team will also have to determine whether some coins are securities subject to disclosures and regulations. The team will also have to look at the merits and demerits of a possible Bitcoin exchange-traded fund that many high profile investors have been calling for as a way of bringing sanity to the sector.