On February 26, 2021, the US Securities and Exchange Commission’s (“SEC”) Division of Examinations published a risk alert in connection with the offer, sale, and trading of digital assets that are securities. The risk alert provides observations made by Division of Examinations staff during examinations of broker-dealers, investment advisers, exchanges, and transfer agents. The risk alert also highlights areas of focus for the Division of Examinations’ future examinations. The Division of Examinations notes that activities relating to digital asset securities “present unique risks to investors.” Market participants should reflect upon their own practices, policies and procedures in light of the considerations highlighted by the risk alert to develop and enhance their compliance programs.
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