The US Securities and Exchange Commission (SEC) has given the nod to the Boston Security Token Exchange (BSTX) to serve as a blockchain-based securities exchange.
BSTX is a new division at the BOX exchange based in Boston. The platform was launched by a collaboration between the BOX exchange and tZERO, the blockchain division for Overstock.
BSTX gets a Greenlight from the SEC
The approval given by the SEC will allow BSTX to integrate blockchain technology to promote faster transaction settlement in the traditional financial market. BSTX had initially filed to offer services related to publicly-traded registered security tokens.
A statement from the SEC on this says, “The commission notes that the [BSTX] Exchange’s current proposal does not involve the trading of digital tokens and such a proposal, or any other additional use of blockchain technology.”
The SEC has not given the BSTX permission to operate as a platform that facilitates activities such as crypto trading. Rather, this approval will allow the exchange to integrate proprietary market data feed and adopt blockchain technology to offer its services.
Through blockchain technology, investors on the exchange will have a chance to enjoy faster transactions, which will be settled on the same day and not after one day, as was previously the norm.
The operations of the BSTX in the blockchain sector will also be closely monitored by the commission. The SEC has given several conditions that the exchange needs to meet to remain compliant.
BSTX will be mandated to join the relevant national market system plans offering equities trading. The exchange should also ensure it complies with the regulatory requirements provided by FINRA. An applicable governance structure and membership to an Intermarket Surveillance Group are also required.
SEC seeking to regulate crypto lending
The SEC has turned its attention towards high-yield lending programs in the cryptocurrency sector. The regulatory body currently focuses on these programs offered by Celsius Network, Gemini and Voyager Digital.
The regulatory body is also looking towards classifying lending products as securities. The commission’s concerns are now shifting from the crypto sector to the decentralized finance space that has boomed over the past year.
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