A Digital Asset Platform Demands Clarity from the SEC

Templum, a digital asset trading platform, submitted a letter to the Securities and Exchange Commission (SEC) requesting regulatory clarity on certain issues in the securities token space.

Specifically, Templum asked the SEC to “provide needed guidance related to post-trade activities in the digital asset space.

In the letter signed by Vincent Molinari, CEO of Templum Markets, and Christopher Pallotta, CEO of Templum, the two executives stated:

“We believe Fintech and blockchain have tremendous potential. However, as this technology develops, regulators must foster innovation without stifling it through unclear regulations. US and foreign regulators have noted the disruptive potential of Fintech and blockchain. They have also recognized the potential of Fintech to revolutionize the financial services industry. We share this belief in the transformative nature of Fintech and support the role of regulators in ensuring that this revolutionary technology develops in a sustainable manner that promotes fair and orderly markets, protects consumers and benifits industry participants.”

Molinari and Pallotta asked the Commission to modernize the regulatory environment for blockchain based securities with the following recommendations:

  • The SEC should clearly define when a blockchain technology platform must register as a clearing corporation and define how blockchain technology may be used by such firms.
  • The SEC should provide clear guidance to the industry as to when a blockchain technology platform must register as a transfer agent and provide guidance to issuers of digital assets as to when they must us a transfer agent.
  • The SEC should modernize the Custody Rule and Customer Protection Rule to take into account and encourage the use of blockchain technology’s ability to track securities transactions

Requesting post-trade clarity from the Commission is not an unreasonable request.

These are issues that industry participants do not frequently discuss yet having defined rules is vital to allow the sector to move forward and test the viability of security tokens and blockchain based platform.