Virtual Currency Update
Contact: Daniel D. Hill
The SEC just recently published a statement on “online trading platforms.” Included within the definition of that phrase are cryptocurrency exchanges. As a result, any investor who trades in digital assets, such as Bitcoin or similar virtual currency, should only do so through a regulated exchange or through a registered broker-dealer.
Many online trading platforms for digital assets refer to themselves as an “exchange.” According to the SEC, however, that is misleading and arguably a material misrepresentation. To be a lawful “exchange,” the platform must be registered as a national securities exchange, or operate under an identified registration exemption. Any such lawful exchange will be registered with the SEC.
If you engage in or are interested in trading in digital assets, particular caution and attention should be paid to how and where any such trading takes place.