The United States SEC has announced that it will focus on firms providing crypto traders with investment advice this year. The update was shared in a published document where the watchdog highlighted its plans for 2023. The US SEC said it would put such firms providing advice about digital assets and crypto portfolios under the microscope for the rest of the year. This way, the regulator wants firms that offer these services to be more careful and objective when recommending digital assets to users.
US SEC document highlight priorities
The US SEC document also mentioned that brokers and firms registered under the watchdog would be monitored to ensure that they provide the required standard of care when giving advice. In addition, the body wants to ensure that these firms make changes to their policies and procedures in line with the changes in the market.
This will enable them to know which firms follow new trends and give advice based on them. This document mirrors the one that was released last year. However, the one of last year was broader because it focused on the type of services that firms provide to consumers instead of the advice they give them.
US SEC wants to stop another FTX-like loss
The US SEC wants to revamp the crypto sector by ensuring that firms have up-to-date risk management systems. This latest document is coming off the back of the news of an inside investigation at the SEC. The regulator is investigating firms initially registered as advisers for investments but now offering users crypto assets to trade with without the needed qualifications and license.
This investigation has been on for more than three months, and the regulator recently intensified it after the mishap at FTX some months back. The report from Reuters said that the body is making it a priority to ensure that users retain their assets cheaply to initially qualified firms to offer advice. According to the law, firms must have a certain degree of qualification to help users keep their digital assets. Aside from that, they would also need to show that they can carry out the services enshrined in the Investment Act published in 1940.