The US Securities and Exchange Commission (SEC) has been busy since the start of the year as it conducted several crackdowns on erring crypto exchanges. Data from a recent JPMorgan research report shows that the SEC took the dominant position in the recent regulatory initiatives in the United States.
A Period Of Regulatory Scrutiny
According to recent research conducted by one of the world’s leading investment bank, JPMorgan, the actions of the SEC has shown a bias in its approach against cryptocurrencies. The research revealed that the regulator has continued classifying all but one crypto asset, Bitcoin, as securities despite repeated rebuttals from the digital asset industry participants.
It noted that Gary Gensler, the commission’s chairman, began enforcing new rules for the crypto industry last September. Gensler indicated that most digital tokens are securities and should be regulated under existing securities laws of the United States.
Furthermore, the JPMorgan study explained that the agency had classified crypto-staking services as securities. According to the report, this paves the way for crypto-staking service providers to seek approval from the SEC to offer securities.
The investment bank predicted that more regulatory actions towards stablecoins issuers, custody platforms, digital asset lending firms, and others are in the pipeline. As the SEC continues to exert its presence in the regulatory landscape, JPMorgan expects the agency to implement policies to ensure regular reporting, disclosure, reserves audits, and assets and liabilities enforcements across the crypto market.
Also read:Nikolaos Panigirtzoglou, the lead analyst in the study, stressed that these regulations would pave the way to having similar guidelines in the crypto like that of traditional finance in the future. The study noted that crypto staking businesses would evolve from serving institutional investors towards decentralized finance (DeFi) stakings for retail investors.
Mounting Enforcement Cases
Furthermore, indications from the securities regulator show that Gensler believes that the crypto ecosystem is playing a game with the commission. He is reportedly quoted to have stated that crypto firms know what to do to operate legally in the US but decided to do the opposite.
However, the crypto community has debunked Gensler’s narrative by stating that the SEC needed to be more straightforward in enforcing the rules across the sector. The SEC chair maintained that the law is straightforward and insisted that the commission will only allow the crypto industry to operate with a clear rule.
Since 2020, the SEC has been in a court battle with several key players in the crypto ecosystem, with Ripple Labs being the most widely talked about legal tussle. In the interim, the regulator has recorded relative successes against some crypto firms such as LBRY, BlockFi, Poloniex, Kraken, Gemini Trust, and Genesis Capital.
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