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SEC Won't Take Action Against Compliance-Focused Digital Security Exchanges
Digital security exchanges that ensure listed assets are legitimate will not face sanctions, the SEC said in an open letter.
By Paddy Baker
Updated Sep 14, 2021, 10:01 a.m. Published Sep 29, 2020, 12:52 p.m.
The Securities and Exchange Commission (SEC) has said digital security exchanges that ensure assets on their books are legitimate in origin can continue to operate unhindered.
STORY CONTINUES BELOW
- In a letter to a senior executive at the Financial Industry Regulatory Authority (FINRA), Wall Street's self-regulatory body, the SEC's trading and markets division said exchanges that go to lengths to comply with existing regulation will not face sanctions.
- As well as conforming to federal securities law, the SEC, which has jurisdiction over FINRA, said such entities will need to introduce procedures that assess if listed digital securities have been sold legitimately throughout their lifetimes.
- This includes checking the initial offering was either properly registered or came under a valid exemption, as well as ensuring secondary market transactions are also compliant.
- The SEC's clampdown on initial coin offerings (ICOs) means it is often characterized as the industry's boogeyman.
- But as the tokenized version of an already heavily regulated asset class, digital security offerings already largely comply with federal law.
- Thus, issuers have already used some of the exemptions allowing them to host a sale without first registering as a public company.
- Indeed, in recent months, the SEC has made steps to better accommodate these sorts of offerings. It published a proposal in March to increase the amount startups can raise under an SEC exemption.
- In the summer, an SEC-registered broker-dealer unveiled plans to launch the first security token platform that can also be used to host compliant offerings.
- FINRA itself has made tentative moves to move forward with the security token industry and just this month approved tZERO's plans to launch a retail-focused broker-dealer.
- As the crusade against unregulated ICOs fades, U.S. regulators, the SEC in particular, may well be preparing the ground for a host of compliant digital security offerings.
See also: SEC Seeking 'Smart Contract' Tracing Tool That Can Spot Security Vulnerabilities
Read the letter in full here:
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What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
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Brazil to test blockchain in state real estate auction to reduce fraud, disputes
The São Paulo auction will record every document involved in the process on blockchain, making it a public, traceable, tamper-evident record.
What to know:
- The Court of Auditors of São Paulo will hold Brazil's first public auction using blockchain technology in an effort to increase transparency and reduce disputes.
- The auction will record every document involved in the process on a blockchain, making it a public, traceable, tamper-evident record.
- The initiative aims to address issues such as document tampering in Brazil's auction market and could pave the way for further adoption of blockchain technology in the country.
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