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SEC’s Office of Compliance Inspections and Examinations Begins Conducting Targeted Reviews Related to Crypto-Assets

The United States Securities and Exchange Commission’s (SEC) Office of Compliance Inspections and Examinations (OCIE) are now conducting examinations of investment advisers concerning “crypto-assets,” which they define to include crypto-currency, initial coin offerings, distributed ledger technology, blockchain or any related products, and pooled investment vehicles investing in these assets or technology.

The examinations are focused on gathering information about an investment adviser’s policies and procedures as it relates to these investments. Specifically, OCIE’s examiners are requesting information about:

  • How investment advisers are charging fees for services related to crypto-assets,
  • How crypto-assets are being valued,
  • Where crypto-assets are being held (i.e., in an individual wallet or at an exchange and what level of due diligence is performed on these custodians,
  • The disclosures and advertisements that are being made to investors about crypto-assets,
  • Information about the exchanges and brokers used for crypto-assets, and
  • How investment advisers are supervising employee or proprietary investments in crypto-assets.

A copy of the most recent request list is available here.

COPYRIGHT © 2022, STARK & STARKNational Law Review, Volume VIII, Number 236
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About this Author

Max L. Schatzow, Stark Law, financial attorney
Associate

Max Schatzow is a member of Stark & Stark’s Investment Management & Securities Group in the Lawrenceville, New Jersey office. Max concentrates his practice on counseling financial service entities including investment advisers, broker-dealers, and private investment companies (e.g., hedge funds, private equity funds, real estate funds, and “fund of funds”) on registration, compliance, liability, and litigation issues.

Max’s practice also focuses on the formation of private investment funds (e.g...

609-219-7450
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