JP Morgan Calls For Urgent Crypto Rules To Avoid Crypto Industry Moving Offshore
The latest reports revealed that JP Morgan is calling on the US government to create a regulatory framework that would legally guide the conduct of crypto firms in the region. The bank reportedly said regulations would help prevent crypto startups from moving offshore because of harsh enforcement action by the SEC.
JP Morgan, an American-based world-largest bank, reportedly raised concerns over the issue because it sees the recent actions of the United States Securities and Exchange Commission, incessantly filing lawsuits against many crypto firms in the US, as a significant force that could drive out crypto firms from the country.
According to the report, the giant bank believed that the latest tyrannical SEC action of filing lawsuits against Coibase and Binance.US, the two largest crypto firms in America, could put the United States crypto market at risk as many startups and investors are already planning to shift their businesses in other countries with more accommodating regulations.
Furthermore, the giant bank claimed that the crypto industry holds billions of US dollars. Hence, its exit from the US market would likely destabilize the economy. Therefore, the need for a comprehensive strategy on how the fast-rising crypto space would be regulated. In addition, it also required the feds to define the roles and responsibilities of the two rival regulators, the SEC and the CFTC.
By calling for the feds to take control of the situation, many experts consider JP Morgan, the banking giant with about $413 billion in market capitalization, to be supportive of the crypto industry ahead of the regulators.
SEC Obstructs Formation Of New Securities Rules
According to Nikolas Panigirtzoglou, the chief financial analyst at JP Morgan, it is pretty impossible to state which digital assets belong to the securities category. However, the SEC is reportedly forcing its securities rules on many primary tokens with high market caps without clear evidence of why they are classified as such.
These intense and unclarified actions are reportedly putting many crypto firms and exchanges into confusion and complicating their operations. In addition, many exchanges and firms like Crypto.com, Etoro, and Robinhood, who were operating initially in the US, are currently fleeing the region to escape any punitive expedition, as per reports.
However, because of the large business scales of both Coinbase and Binance.US, it is difficult for them to shift their focus to other countries swiftly. Hence, they defended their rights in court, refuting the charges the US SEC threw at them.
The SEC is reportedly using securities laws and regulation that was created over 90 years ago, even before the invention of blockchain, as bases for the lawsuit. Meanwhile, crypto experts claimed that by doing such, the SEC is obstructing the creation of new laws that suit the crypto industry.
In addition, they claimed it seemed the regulator had cautiously planned its actions most times to deter the development of the rapidly-growing crypto industry to further advocate and promote the proposed central bank digital currency.
Furthermore, many believed that politics is likely the bedrock of the oppressive actions put forth by the SEC against the industry. Hence, many called for the SEC chair, Gary Gensler, to be relieved from his post at the agency.
The SEC Agency Should Be Reformed
Additionally, Tom Emmer and Warren Davidson, two US Representatives, reportedly proposed an act dubbed the “SEC Stabilization Act” to the House of Representatives recently. The act calls for total dissolution and reformation of the SEC agency.
Warren Davidson stated that the feds must protect the American capital marketplaces from the tyrannical rule of the SEC’s former and current chair. Tom Emmer added that chair Gensler is regulating with bad faith as most of his decisions negate the public investors’ interests which he swore to protect.
The bill also sought to ensure both Democratic and Republican parties were equally represented to prevent one party from having a major pull in the commission.
Pressure seems to be mounting on the SEC chair from every angle recently. According to a report, he was once a candidate for compliance at Binance exchange but was rejected by the CEO. Hence, many speculate that his recent actions against the crypto industry were retribution for his rejection.
However, the latest development has covered him, and he didn’t commit any more mishaps to keep his job. Meanwhile, the whole crypto world is anticipating the court’s judgment on the lawsuit against Binance.US and Coinbase, as a lot depends on it.
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