Crypto firms blast SEC, Washington for unclear regulations

According to many executives who talked to Trade Algo, the U.S. government's lack of clear regulations for the sector and the Securities and Exchange Commission's aggressive efforts against digital currency startups have crypto companies angry.

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In contrast to other nations, the United States has not yet developed a thorough framework or set of legislation that permit cryptocurrency and blockchain enterprises to function without concern for being targeted by regulators.

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Since the demise of the cryptocurrency exchange FTX last year, the U.S. The SEC has increased its enforcement efforts against businesses.

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The SEC sent a Wells notice to Coinbase on Wednesday, alerting the firm that it had discovered possible violations of American securities law. The SEC also announced allegations of fraud and unlicensed securities against Justin Sun, the originator of cryptocurrency, and famous people who supported the digital coinage he was promoting.

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A number of other businesses, including Ripple, Genesis, and Gemini, are now involved in legal issues with the SEC.

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Due to the delicate nature of the subject, a top crypto executive who spoke to Trade Algo at the Paris Blockchain Week event and requested anonymity said, "It feels uncollaborative." It's incredibly upsetting for players who have been performing well all along.

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According to Joe Lubin, CEO of ConsenSys and co-founder of Ethereum, the ecosystem is "generally upset," he told Trade Algo on Thursday.

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"I believe that we are still sort of watching the SEC engage in this practice of penalizing the individuals who are still living," the speaker said. Nicolas Cary, president of Blockchain.com, told Trade Algo on Thursday that it was quite annoying to see.

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As the crypto sector was founded many years after the Howey Test, one of the crucial tests to establish whether or not something is a security, most of what the SEC has done entails applying current legislation to it.

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The crypto community as a whole believes that this is not the best course of action.

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"When you attempt to study cryptocurrency through the prism of traditional finance, I believe you have less effective regulatory regimes. You inquire, "Is it somewhat similar to a security?" Is it a product? ’ ... No, it isn't really any of those things. Oliver Linch, CEO of Bittrex Global, said on Trade Algo on Wednesday, "It's crypto.

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When reached by Trade Algo, the SEC wasn't immediately available for comment.

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‘Clarity’

At Paris Blockchain Week, among the most important crypto conferences in Europe, Trade Algo met with a large number of executives on the ground, and one demand they made of U.S. regulators was the need for clarification.

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The creator of the blockchain business Algorand, Silvio Micali, told Trade Algo on Wednesday that "we'd love to see just a more clarity in regulation."

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Nonetheless, some have voiced some sympathy for the SEC, arguing that the watchdog is only adhering to the laws as they are and that it is the responsibility of the American government to modify them.

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What should they do, exactly? The world appears to be a nail if all you have is a hammer, according to Bittrex Global's Linch.

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The SEC is "trying to do their duty to protect consumers," according to Cary of Blockchain.com.

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How the SEC puts it

Many of these issues were covered by SEC Chair Gary Gensler in an opinion post he published in The Hill last month, saying the agency has been transparent about the laws.

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The talking argument that the securities regulations lack clarity is unpersuasive, according to Gensler. Some cryptocurrency companies can argue that the regulations are murky rather than acknowledging that their platforms don't offer enough investor protection.

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He outlined situations in which cryptocurrency companies are subject to the existing securities regulations, such as when a business provides financing products.

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Crypto middlemen "aren't exactly lined up" to register with the SEC and follow the laws passed by Congress, according to Gensler.

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Enforcement proceedings, according to the SEC chair, are "another tool" in the regulator's inventory for catching "noncompliance."

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The US could lag behind Europe

CEOs have cautioned that the United States may lag behind other nations and jurisdictions due to a lack of clear legislation.

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Congress must, in my opinion, genuinely develop a legal regulatory regime that properly governs cryptocurrency because... Crypto will be here to stay, according to Linch.

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Governments all across the world are considering how to regulate cryptocurrency. Switzerland and Dubai, for example, have advertised themselves as crypto-friendly locations with kind regulations.

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The Markets in Crypto-Assets, or MiCA, law, intended to put certain restrictions in and around digital currency enterprises, is expected to be introduced by the European Union this year.

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According to Monica Long, president of Ripple, when questioned by Trade Algo if the United States is in danger of lagging behind other nations in the crypto economy, "We think so."

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According to Long, Europe is taking the lead in establishing very specific legislation and norms that permit traditional banking to embrace cryptocurrency as well as cryptocurrency startups.

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The president of Ripple referred to MiCA, a statute that needed the approval of all 27 EU members, and said it was "amazing" that the U.S. had a single government yet couldn't get its act together.