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October 5, 2022
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Cryptocurrency SEC Doesn’t Need Special Regulation

An SEC commissioner says watchdog’s regulatory policy is sufficient to oversee the cryptocurrency industry

While there have been calls from the cryptocurrency community for the SEC to provide clearer regulation for the industry, one of the agency’s commissioners thinks otherwise.

The SEC doesn’t need to reinvent the wheel

Allison Lee, Commissioner of the US Securities and Exchange Commission (SEC), while attending a DC bar event on cryptocurrency regulation, he said that cryptocurrencies do not need a special set of rules.

According to Lee:

“Rather than pursuing approaches that would single out digital assets for special treatment under SEC regulations, treatments that other asset classes do not, in my opinion, we should continue to work together to bring these assets and emerging markets into compliance.”

Lee’s comments come as the SEC led by Gary Gensler continues to heed demands from cryptocurrency proponents and government policymakers to introduce clearly defined laws for America’s cryptocurrency space.

The Commission has appointed a new senior advisor for cryptocurrency oversight as part of efforts to address the necessary modalities to police the U.S. cryptocurrency landscape.

There are, however, indications that cryptocurrency regulations may not be high on the Commission’s agenda, especially given its focus on issues such as meme stocks and going after retail companies like Robinhood that practice payment by order flow (PFOF). ).

Gensler, however, stated that the SEC plans to oversee the cryptocurrency space, focusing on diverse market segments such as decentralized finance (DeFi), cryptocurrency lending, and token offerings, among others.

In fact, cryptocurrency lending is under significant scrutiny from state and federal regulatory agencies across the United States. In October 2021, the New York Attorney General’s Office announced plans to shut down cryptocurrency loan providers that offered services in the state.

Such was the regulatory scrutiny directed at the industry that giant Coinbase was forced to pause the launch of its lending service in September 2021.

Continued clamor for regulatory clarity

In early January, Gensler was asked if Ethereum was considered a security. The SEC chairman did not give a straight answer to the question, although he mentioned in 2018 that the second-largest crypto asset would be seen as security.

Meanwhile, there is an ongoing legal battle between the SEC and blockchain firm Ripple, with the regulator accusing the company of selling unregistered XRP tokens. Ripple, on the other hand, countered the SEC’s claim, stating that XRP is not classified as a security.

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