Crypto-currency market retreats in face of increased regulatory pressure from Sec

The SEC recently announced its new 2023 examination and investigation priorities to further dig into the crypto-currency sector. “The Securities and Exchange Commission’s Examination Division publishes its examination priorities annually to provide insight into its risk-based approach, including areas it believes pose potential risks to investors and the integrity of the U.S. financial markets“, the SEC said in a press release.

In the list of priorities for this year, the commission mentions several areas that pose risks to investors, including emerging technologies and crypto-currencies. The SEC said it would study broker-dealers and registered investment advisers (RIAs) that use new financial technologies or employ new practices. “The scrutiny of filers will focus on the’offering, selling, recommending or advising on trading in crypto assets or crypto-currencies.”

A closer look at exchanges

On Wednesday, Bloomberg reported that the SEC had launched an investigation into the Kraken exchange to determine whether it was trading securities without notifying the SEC. The investigation is reportedly well underway, and it is possible that a settlement could be reached between the regulator and Kraken, Bloomberg suggests.

In other news, Coinbase CEO Brian Armstrong, said Wednesday on Twitter that’there were rumors that the SEC might ban individual customers from accessing crypto-currency staking services. Staking is associated with locking cryptocurrencies as collateral for a transaction, for example to secure a loan.

1/ We’re hearing rumors that the SEC would like to get rid of crypto staking in the U.S. for retail customers. I hope that’s not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen.

February 8, 2023

“We are hearing rumors that the SEC would like to get rid of crypto-currency staking in the US for retail customers. I’hope this is not the case, as I think it would be a terrible path for the U.S. if this were to happen“, noted Brian Armstrong.

Brian Armstrong emphasized that staking is not a security to be regulated or prohibited by the SEC. “Staking is a really important innovation in crypto-currencies. It allows users to participate directly in the execution of open crypto networks” he says.

At the time of writing, bitcoin is trading at USD22,756, down 1.38% over the past 24 hours, according to the CryptoNews Price Index. The market capitalization of crypto-currencies is down 1.5% over the same period and stands at $1.065 trillion.