Reuters/ Pete Schroeder/ March 7, 2018

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission said on Wednesday that many online trading platforms for cryptocurrencies should be registered with the regulator and subject to additional rules, in a further sign regulators are cracking down on the digital currency sector.

In a statement, the SEC said these “potentially unlawful” platforms may be giving investors an unearned sense of safety by labelling themselves as “exchanges.” The regulator said these platforms need to register with the SEC as a regulated national securities exchange or an alternate trading system, or ATS.

The new statement marks the latest effort by the SEC to apply federal securities laws to the rapidly growing cryptocurrency sector. SEC Chief Jay Clayton has repeatedly expressed concern about cryptocurrencies and “initial coin offerings,” or ICOs, and has urged investors to exercise caution.

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