Crypto assets and other new technologies are among the SEC’s priorities for 2023. The agency head Gary Gensler said.
“The Expertise Department will undertake a review of broker-dealers and RIA who use new financial technologies or adopt new methods, including technological and online solutions,” the press release said.
One of the department’s tasks will be to assess whether firms working with digital assets comply with applicable investor-protection standards when formulating recommendations and investment advice.
Officials will also focus on evaluating how often companies review their methods for regulatory compliance, disclosure, and risk management.
Another item on the agenda will be ensuring that investment advisers comply with the new marketing rule, which limits the use of testimonials and endorsements, including by celebrities, in promoting financial products.
Other items on the agenda include reviewing crypto firms’ cybersecurity practices and checking whether investment advisers meet fiduciary duties. The latter include examining compliance with risk assessment, asset custody, and conflicts-of-interest management.
In January, media reported about a check of RIAs for compliance with rules and sub-regulatory acts related to the custody of digital assets.
In November 2022, U.S. Representative Tom Emmer criticized the SEC chair for the failure to regulate the digital-asset industry, which led to the collapse of FTX.
Last year the Commission brought 30 cryptocurrency-related cases.
Cornerstone Research suggested that oversight of the industry would remain a priority for the SEC under Gary Gensler’s leadership. They noted that in May the agency nearly doubled the size of the relevant division.