There have been previous posts in this blog about statements by the U.S. SEC saying that most ICO’s would seem to qualify as securities offering and thus must be registered (or qualify for an exemption).  In a Statement issued yesterday, the SEC took another tact with implications for the cryptocurrency industry, this time going after exchanges.  The SEC said, “If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”

As was the case with its ICO statements, the SEC is concerned about protecting investors.  The SEC said these “potentially unlawful” platforms may be giving investors an unearned sense of safety by labelling themselves as “exchanges.”  If they are not registered, however, they follow their own rules.  For example, investors are not protected from the exchange’s giving priority to larger orders.  The Statement included a list of questions investors should ask before they decide to trade digital assets on an online trading platform.


David Zaslowsky has a degree in computer science and, before going to Yale Law School, was a computer programmer. He is currently the Chairman of the Litigation Department of the firm’s New York office. His practice focuses on international litigation and arbitration. He has been involved in cases in trial and appellate courts across the United States and before arbitral institutions around the world. Many of David’s cases, including some patent cases, have related to technology. Since 2008, David has been included in Chambers for his expertise in international arbitration.