As the local press has reported that New York-based Bitcoin trading platform Atlas ATS is partnering with a small U.S. stock exchange so that it can expedite a regulatory approval process that has stymied the development of digital-currency exchanges in the US, it will become the first ever first Bitcoin marketplace to be regulated by a quasi-government entity.
An announcement regarding this shows that the National Stock Exchange (NSE) which has been recognized by the Securities and Exchange Commission as a self-regulatory organization (SRO) is expected to write and enforce the rules governing how Atlas’s exchange functions. Owned by the CBOE Holdings, NSE will have all regulatory powers on Atlas ATS.
According to Atlas Chief Executive Officer Shawn Solves it is important for his company to have credibility and once the two parties have agreed to those rules and surveillance procedures, it will become easy. The measure is aimed to reduce the time which would have otherwise been taken up by the lengthy process that a budding Bitcoin exchange goes through.
Bitcoin exchanges that are going through the process of money-transmitting licenses from nearly all 50 US states following instructions provided in October by the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN have been complaining that the entire process is time consuming.
Rule book would be based on SEC-approved rules
However, one exception kept by that guidance according to FinCEN is that federally regulated entities would be exempt from those requirements and the effort from Atlas ATS is to utilize that short cut. At the same time there is no clue what would the reaction be from the SEC, which doesn’t regulate Bitcoin, but might react if the agreement between Atlas ATS and NSE goes through.
It is to be noted that Atlas ATS has declared that its rule book would be based on SEC-approved rules used by US stock and option exchanges. It will follow the set requirements for record books, the segregation of customer accounts, security of assets and other standards to be on the good book.
Atlas functions like an automated Bitcoin trading system and provides rapid-fire, anonymous matching services for clients such as high-frequency trading firms. Launched last month with links to sister exchanges in Hong Kong and Singapore, it is currently processing 7,000 to 10,000 transactions a day while the public exchange is handling volume of just 100 to 1,000 trades a day.
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