SEC Announces Increased Oversight of Cryptocurrencies in 2024 Fiscal Plan
The U.S. Securities and Exchange Commission (SEC) released its fiscal plan for 2024 today, detailing a heightened regulatory focus on cryptocurrency and associated financial technologies. This report comes from the SEC's Division of Examinations and outlines the agency's approach to emerging market risks.
The SEC announced in its release that it would be giving special attention to crypto assets, blockchain, and other emerging financial technologies that could potentially pose risks to investors and market integrity.
The Division is particularly attentive to the rapid growth of investments in crypto assets and associated services, along with emerging fintech solutions like mobile applications from broker-dealers and automated investment advice platforms.
The plan also specifies a compliance deadline of May 28, 2024 for recently adopted rules that shorten the standard settlement cycle for most broker-dealer transactions to one business day after the trade.
Given the continued volatility in the cryptocurrency markets, the SEC's Division will continue to oversee and conduct examinations of registrants. These examinations will focus on a range of activities involving crypto assets or related products.
The main areas of concern are the registrants' standards of conduct, especially when advising retail customers and clients, and their compliance practices. This includes reviews of crypto asset wallets, custody practices, Bank Secrecy Act (BSA) compliance, and valuation procedures.
In 2023, the SEC demonstrated a nuanced approach to cryptocurrency regulation, oscillating between caution and firm enforcement. This dual strategy was especially visible in the SEC's dealings with Grayscale over its Bitcoin Trust's conversion into an
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