SEC to make it binding on crypto exchange platforms to warn buyers of risks
The Securities and Exchange Commission (SEC) has drafted a new regulation to govern the exchange of cryptocurrencies by requiring the exchange platforms to warn buyers of the risk of losing their money.
The SEC is soliciting public opinion on the draft regulation through its website and the online public hearing process will continue until February 24.
The new regulation has been drafted after taking into account the opinions of operators of digital asset trading platforms and the general people on how to inform the public of the risks of trading. The opinions were solicited from September 15 to October 17 last year.
After the SEC had compiled the opinions from the round of hearings, it resolved during a meeting on December 1 to abolish the minimum purchase of a cryptocurrency in line with opinions.
As per the new draft regulation, operators of cryptocurrency trading platforms would be required to visibly announce the following wordings on their platforms: “Cryptocurrencies are fraught with high risks. You may lose your entire invested amount.”
The new draft also requires operators to inform investors of the estimated amount of investment, and the investors must be told to acknowledge their awareness of the risks before they can make purchases.
The SEC said the new regulation would take effect 30 days after being published in the Royal Gazette. It is expected to take effect in the middle of this year.
