SEC authorises BSTX for blockchain settlements on conventional marketplaces

The SEC clearance of BSTX does not pertain to cryptocurrency trading or any other use of blockchain technology.

The Boston Security Token Exchange (BSTX), a new facility of the Boston-based BOX exchange, has gained regulatory authority to operate as a blockchain-based securities exchange from the United States Securities and Exchange Commission (SEC).

BSTX was co-founded by BOX and Overstock’s blockchain subsidiary, tZERO, with the initial goal of obtaining clearance to issue publicly traded registered security tokens. The SEC clearance to operate as a national securities exchange, on the other hand, enables BSTX to leverage blockchain technology to accelerate settlements in conventional markets. According to the Securities and Exchange Commission,

“The Commission observes that the existing proposal of the [BSTX] Exchange does not include the trading of digital tokens or any other further use of blockchain technology.”

While the SEC previously refused BSTX licence to provide cryptocurrency-related services, the recent certification permits the facility to utilise its own market data feed, BSTX Market Data Blockchain.

Additionally, BSTX will use blockchain technology to provide investors with same-day (“T+0”) or next-day (“T+1”) transaction timings, as opposed to the usual two-business-day (“T+2”) settlement cycle used by traditional markets.

Along with the regulatory clearance based on BSTX’s proposed rule changes (SR-BOX-2021-06), the SEC imposed four requirements on BOX that are consistent with BSTX’s business operations.

The criteria involves participation in all eligible national market system plans for equity trading, as well as a Regulatory Services Agreement with FINRA, Intermarket Surveillance Group membership for the BSTX facility, and an appropriate governance structure.

In addition to the aforementioned events, the SEC is apparently scrutinising some of Gemini’s, Celsius Network’s, and Voyager Digital’s high-yield crypto lending businesses.

As Cointelegraph previously reported, the SEC is investigating the possibility of registering cryptocurrency lending businesses as securities. According to a Bloomberg storey on the topic, the SEC’s primary worry is with crypto lending businesses’ high-yield offerings.

Also Read: Businesses With Bitcoin On Their Balance Sheets Suffer A Near-$7 Billion Loss