Several exchanges that make possible initial exchange offerings may be breaking United States securities laws. The above statement is given by a top Securities and Exchange Commission official.
Speaking at Consensus 2019 conference in New York, Valerie Szczepanik, the Securities and Exchange Commission’s senior advisor for virtual assets and innovation, said digital asset exchanges that facilitate cryptocurrency sales for a fee probably meet the legal definition of securities dealers if the issuer or any of the buyers are based in the United States of America.
It is to be noted that the crypto exchanges require to follow the registration and licensing requirements for broker-dealers, alternative trading systems or national securities exchanges. As per Szczepanik, the crypto exchanges are going to be in hot water, if they’re not following the guidelines.
During a chat with Bloomberg reporter Matthew Leising, Szczepanik mentioned that platforms seeking to list these tokens for a listing fee or bring buyers to the table for issuers are possibly engaging in the broker-dealer activity. He further added that if they are not registered they will find themselves in trouble in the United States. if they have a United States issuer or the United States buyers if they are operating on the United States market.
Interestingly, he did not mention any specific crypto exchanges. Nevertheless, OKEx, Binance, KuCoin, and Bittrex are among the digital asset exchanges that have facilitated Initial Exchange Offerings. It is to be noted that these transactions are assumed to be generating millions of dollars in fees for such platforms.