The past two weeks have seen a flurry of proposed regulatory activity in cryptocurrency. Governments around the world are making a sustained push for regulation similar in form and scope to regulations in more traditional financial markets. Many are now wondering who will regulate my crypto, and how do they plan to regulate it?
Who Will Regulate Your Crypto In The U.S.
Two days ago, U.S. SEC Chair Gary Gensler gave one of the first tangible answers to that question. He asked his agency to determine how it might extend traditional regulatory protections in financial markets (such as in the stock market) to the crypto space. Speaking on behalf of the SEC (with a nod to the CFTC), Gensler said that crypto exchanges serve functions similar to other regulated exchanges and should therefore be regulated in the same fashion. See SEC Chair Gensler says agency is planning greater oversight of crypto markets to protect investors.
Gensler’s comments come in the wake of one of the largest crypto heists in history—a theft in which hackers stole over $600 million from a digital ledger used by Axie Infinity (an online game). The hackers stole more than 173,000 Ethereum tokens and over $25.5 million in stablecoins. Regulatory attention should not come as a surprise after a heist of this order, especially in light of ever increasing institutional interest in crypto.
Who Will Regulate Your Crypto Abroad
Gensler’s comments also follow on the heels of action taken by the U.K. a few weeks ago. A regulatory body there (the Financial Conduct Authority) proposed temporarily suspending official registrations for some crypto companies until those companies comply with U.K. anti-money laundering and counter-terrorism laws. Those proposed regulations preceded the EU taking similar measures last week, when it approved draft rules requiring exchanges to provide information about buyers and sellers in the market directly to regulators.
Much of this onslaught of cyrpto regulation around the world has been in response to Russia’s war against Ukraine. Many countries simply do not want any part in funding Russia’s egregious human rights violations, or they at least want an eye on whether crypto is funding those violations (and a means to stop it). Russia’s aggression has indirectly been a catalyst for regulators across the world.
What Regulation Might Follow?
Though there has not yet been much SEC (or other United States agency) guidance regarding the rules it might actually implement for crypto, it is increasingly clear that those rules will take roughly the same form as the disclosure requirements imposed on more traditional financial markets. In both the U.K. and the EU, crypto’s anonymity has been a prime target of regulators and we expect the same to occur in the United States and abroad. Industry players—such as Coinbase—have begun lightly pushing back on these measures, citing privacy concerns. The rising frequency of crypto scams that benefit from anonymity is also driving this worldwide push. For examples of how one of the biggest and most common of these scams go down, check out The Butchering the Pig (Crypto – Forex) Scam: With Love from China.
The scope and extent of proposed crypto regulations directly impacts many, if not all, who invest or utilize cryptocurrency. Stay tuned for the latest updates on the regulatory landscape—and how those regulatory changes will impact your business.
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Original Source : harrisbricken.com
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