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Digital Assets Should Get Ready For Bifurcation

All assets and their trading markets suffer in the hands of regulation. For example, there were different regulations for the commodities markets before the global financial crisis that happened 13 years ago.

The FCP ’77 Act

The FCP 1977 act forbade American citizens and firms from offering bribes to enhance their business objectives. Hence, consumers, commodity traders, and raw material producers can access fewer opportunities than their counterparts from other regions. In these regions, there is always no difference between commodity producers and the government. 

Hence, American businesses have no choice but to patronize other market players, especially China. Then, the Dodd-Frank act increased regulatory oversight into other transactions, especially physical swaps. In the last few months, traders have been accused of what is termed white-collar crimes such as spoofing. 

Also, regulatory oversight functions have increased in the last decade. Hence, this regulatory oversight will soon extend into the nascent digital asset category. This even becomes more necessary since the virtual asset class has become a threat to a crucial power source of the government – the money supply. 

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Hence, the government won’t show mercy in its regulation of the digital asset sector. The rule will be passed into law quicker as the market cap of this asset category increases. The first of them was the SEC’s warning notice to Coinbase about launching a new virtual asset product.

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A Warning To Other Crypto Players

Bitcoin reached a multi-month peak about two weeks ago when el Salvador adopted the king coin as an official currency. But BTC price declined sharply on that same day too. It fell from $53K during the morning session to over $43.5K later in the day.

All the technical indicators on the daily and weekly charts indicate bearishness. BTC still declined further to a little over $43K on September 13. The SEC’s warning notice to Coinbase exchange was attributed to the significant drop in BTC price. Part of the notice states that the SEC would issue legal action against the leading exchange for launching its Coinbase lend initiative.

The initiative enables crypto holders to borrow tokens from each other, with the lenders receiving a percentage interest as stipulated by the exchange. Hence, the SEC warned Coinbase to reconsider launching this offer. The notice also serves as a warning to other players in the digital assets space.

Torn Between A Crypto Advocate And A Political Agenda

Current SEC chief, Gary Gensler, headed CFTC before his recent appointment. When he was in his previous position, he was partly responsible for listing BTC futures on various future exchanges, especially the CME. He had considered the proposal before his tenure as CFTC chief expired.

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While he was CFTC chief, Gensler showed wide admiration for the blockchain and crypto space. Also, Gensler lectured FinTech at MIT, a subject whose main foundation is cryptocurrency and blockchain.

Hence, some crypto enthusiasts logically assumed that Gensler would propose crypto-friendly policies during his term as SEC chief. But he seemed torn between being a crypto advocate and serving a political agenda, at least for now.


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Shelly Melancon (Switzerland)

Shelly is a cryptocurrency enthusiast from Switzerland, she bought her first crypto in 2015 when it was way less popular then it is today and since 2017 she has been writing about cryptocurrency for online news portals. Shelly is the newest addition to the Tokenhell team, she writes mostly news and reviews related articles , stay tuned to her posts to stay up to date with the crypto world.

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