The US Securities and Exchange Commission is mulling how much of an equities-like regulatory framework it should overlay on the cryptocurrencies and initial coin offering markets.

“I am not sure if all the rules would transfer over,” said Brett Redfearn, director of the SEC’s Division of Markets and Trading, at the DTCC’s third annual Fintech Symposium in Midtown Manhattan. “However, there are principles like knowing what the best price is, how to think about best execution and other issues that could be applied.”

Risk issues such as fraud, market manipulation, and cybersecurity are the division’s top concerns.

“In a universe where new assets are coming to markets, there is fear of missing out, and there are people throwing money on top of money,” Redfearn said. “There is a significant risk of fraud.”

Although the SEC has long had rules in place to address spoofing, front-running, and wash trades as well as ‘pump and dump’ schemes in equities markets, the same cannot be said for nascent digital asset markets.

There are 1,500 digital assets trading in the secondary market and discovering their proper price is nigh impossible.

The situation reminds Redfearn of the advent of electronic communication networks in the early 1990s. “Nothing was connected, and you did not know what the price was,” he recalled.

But unlike the equities markets, there are no SEC-registered exchanges or alternative trading systems that would provide the same investor protections for the digital asset markets, according to Redfearn.

He noted that many startups come to the SEC to discuss “doing things right,” but many just lack follow-through.

“You ask them if they have registered as an exchange, ATS, broker-dealer, or a transfer agent and they will often say ‘We have not done or started that yet’,” said Redfearn.

Despite the trend, industry participants have requested far more regulatory guidance from the SEC in a recent hearing before the House Financial Services Committee’s subcommittee on Capital Markets, Securities, and Investments regarding cryptocurrencies and ICO.

The Division of Trading and Markets issued its initial guidance on March 7, prior to the hearing.

“We thought it was about time to put out a statement,” said Redfearn. “Chairman Clayton already had, and the Division of Wealth Management had issued its guidance.”

Redfearn expects that far more guidance is to come. “This space is moving and evolving so fast, I cannot think that these would be the final words,” he added.