Center for American Progress (CAP) officials have issued a new report offering recommendations to the Securities and Exchange Commission (SEC) regarding efforts to bolster digital asset trading protections.
The analysis notes that digital assets meet the criteria to be considered a security, thereby enabling the SEC to exercise authority over how the assets are issued, bought and sold.
“Without oversight and the transparency of cryptocurrency markets, investors are being significantly harmed, and many are losing their life savings,” Todd Phillips, the report author and the CAP’s director of financial regulation and corporate governance, said. “Fortunately, regulators already have the legal authority to address many of the risks that digital assets pose to investors, the environment, and the economy at large.”
Phillips said the SEC and all of the other financial regulators should use their existing authority to ensure digital assets markets are in accordance with environmental, social and governance goals.
CAP report recommendations, per the organization, include the SEC disclosing blockchains’ environmental impact or imposing regulations to mitigate the impacts; requiring digital asset exchanges use trust companies to eliminate blockchain hashing; requiring domestic brokers trading digital assets comply with securities anti-money laundering and tax reporting laws; and enforcing existing investor protections laws.