Crypto trading platforms worldwide should be aware of recent SEC actions if they provide access to US persons or persons within the U.S. for trading.

Global financial regulatory authorities have begun to take action and release guidance regarding the emerging cryptocurrency markets, including the sale and trading of tokens, coins, or other digital or crypto assets. Some regulatory authorities, such as those in the United Kingdom, Germany, Switzerland, Hong Kong, and Singapore, have issued statements or guidance to alert market participants that digital or crypto assets may be qualified as regulated financial instruments (for example, securities) and must comply with existing rules applicable to such instruments. Along this line, the Chairman of the Securities Exchange Commission (SEC) in the United States, has stated that many tokens are, in substance, securities and the offerings and sales of tokens that are securities must comply with the US securities laws. Similarly, if digital assets are viewed as securities, the question arises of what the ensuing regulatory implications are for a digital asset trading platform, including how such trading platform facilitating secondary market trading would be regulated. In a recent development, the SEC brought an enforcement action and, through its Divisions of Enforcement and Trading and Markets, issued a public statement. Together these actions provide insight into the agency’s views on how the US federal securities laws apply to crypto or digital asset trading platforms that facilitate trading in assets that are securities.