Crypto Exchanges Seek Alternative Trading System (ATS) Licenses As SEC Oversight Tightens
Regulators in the cryptocurrency market have vowed that they will be enhancing their oversight and transparency requirements on alternative trading systems (ATS). The U.S. Securities and Exchange Commission (SEC) announced back on Wednesday that it will be adopting amendments to the ATS regulatory framework.
These rules will enable and allow the agency to have a better control over trading platforms, including exchanges. And it is important to mention that crypto exchanges are pursuing these ATS licenses.
Sec Chairman Jay Clayton said about this:
“I applaud the staff’s retrospective review of our regulation of ATSs. I agree that promoting greater transparency in order interaction, matching, and execution will help empower investors and their intermediaries to find those trading venues that best meet their trading and investing objectives.”
The timing of the approval is remarkable, because it coincides with the request that several cryptocurrency exchanges are doing about new ATS licenses with the intention to list Initial Coin Offering (ICOs) tokens and other cryptos deemed as securities.
For example, an important firm involved in this field is Coinbase. The famous crypto platform announced that it acquired three firms holding federal licenses, including the so called Venovate Marketplace, that is registered as an ATS.
Circle, a company that acquired the crypto trading platform Poloniex, has also confirmed that will be registering with the SEC as a licensed broker and as trading venue. The important and known e-commerce business, Overstock, already has an ATS.
Chairman Clayton explained that ICO tokens are almost always considered as securities. This is a crucial term, because trading platforms that list those tokens and do not have regulatory authorization could face enforcement actions.
On August the 10th, the SEC will probably give a decision whether it will approve the first Bitcoin ETF or not, something that could be potentially bullish for the crypto market. The main complaint made by the SEC is that they shouldn’t be accessible to retail investors.