Reported by MICHAEL BROMBERG

With cryptocurrency markets hovering at a global market capitalization of over $1.3 trillion, financial advisors are likely to encounter some clients who already own crypto and others with questions about investing in digital assets. Unfortunately, uncertainties around current and future regulations could create a quandary for financial advisors when they discuss or recommend crypto investments.

Let’s look at what financial advisors need to know about the regulatory landscape for cryptocurrencies in the United States.

Financial Regulators Affecting Crypto

• Securities and Exchange Commission (SEC): The SEC oversees the issuance and sale of securities, including digital assets that meet the definition of securities. This means cryptocurrencies that are considered securities must be registered with the SEC and comply with its regulations.
• Commodity Futures Trading Commission (CFTC): The CFTC regulates derivatives and futures contracts, including those based on cryptocurrencies. This means that trading in crypto futures and options falls under the CFTC’s purview.
• Financial Crimes Enforcement Network (FinCEN): FinCEN is responsible for combating money laundering and terrorist financing, including through the regulation of digital currency exchanges and other entities involved in crypto transactions.
• Internal Revenue Service (IRS): The IRS treats cryptocurrencies as property for tax purposes, meaning gains and losses from crypto transactions are subject to capital gains taxes.
• Office of the Comptroller of the Currency (OCC): The OCC regulates national banks, and it has issued guidance on how banks can engage in crypto-related activities.
• Federal Deposit Insurance Corp. (FDIC): The FDIC insures deposits of member banks, and it has issued guidelines on how banks can manage risks associated with crypto activities.
• Federal Trade Commission (FTC): The FTC protects consumers from unfair and deceptive practices, including those related to cryptocurrencies.

Read full report: https://www.investopedia.com/crypto-regulations-for-financial-advisors-8402046