Digital currency can be applied in ways that subject the currency to
regulatory oversight as financial securities. Digital currency platforms can be used to
support and operate electronic trading exchanges for the sale and purchase of financial
securities. This dual nature of virtual currency systems subjects those systems to
multiple levels of regulatory oversight. To the extent that digital currency is used as a
security, it is subject to traditional securities regulation. When virtual currency
platforms operate to enable securities trading, they are subject to regulatory oversight as
securities trading exchanges. The dual nature of digital currency systems substantially
increases the scope and complexity of legal compliance efforts.
Keywords: Australia, crypto-stocks, cyber-securities, electronically traded funds,
exchange traded notes, Finland, Ireland, Israel, Overstock.com, Project Medici,
securities, Securities and Exchange Commission, stocks, Sweden, trading
exchange.
