Cryptocurrency regulation in the US has been a topic of great debate for many years. With its explosive growth in recent years, the issue of how to regulate digital assets has become more pressing.
While the SEC has taken some steps to establish a regulatory framework for crypto, it has dramatically shrouded the process in secrecy. Recently, however, there have been signs that the US is moving to put together a framework for crypto regulation.
This process has primarily been happening “behind closed doors,” according to Kristin Smith, Executive Director of the Blockchain Association.
A Comprehensive Look At Crypto Regulations After FTX Collapse
In a recent interview, Smith said that the US government has been working on crypto regulation for some time now. Still, there has been a lot of mistrust between the government and the crypto industry.
This distrust is primarily due to the collapse of FTX last year. The United States Congress ought to take a hands-on approach concerning crypto regulation and make it an “open procedure where the whole commercial center is surveyed “comprehensively,” as recommended by Smith.
The Blockchain Association CEO explained that the industry’s happenings necessitate US legislators to enact crypto. Even though regulators are taking swift action, Smith points out that progress with legislation is happening “behind the scenes.”
Also read:He further indicated the regulatory move is essential for greater industry participation in a more “transparent” process, entailing Congress. Smith believes that the issue with regulators leading legislation after enforcing action and settlements is due to “precise details and situations.”
She remarked that it is a challenging situation for Congress, with many people in Washington D.C. familiar with former FTX CEO Sam Bankman-Fried experiencing a sense of being “cheated” and “let down” following the failure of his digital currency exchange platform in November 2022.
New Laws To Stabilize Digital Money Services
Smith is confident that laws for stabilizing digital money will be set up in the US soon, mentioning that Congress has been looking into it since 2019 and the “research has been finished.” She mentioned that it “was close” to happening last year before FTX’s downfall.
She emphasized that the danger posed by digital currencies is unlike that posed by traditional financial services. Hence, regulators must focus more on controlling the market and adapting policies to these risks.
Smith further explained that instead of devoting energy to regulating crypto-related criminal activity, focusing on stabilizing the market and implementing clear rules is more important. She also declared that transactions in the crypto world are more traceable and transparent than those in the traditional finance system.
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