It seems that the Security and exchange commission (SEC) has no plan to regulate the crypto industry this year based on the newly released agenda for its next meeting. Most crypto enthusiasts were hoping for some friendly crypto regulations when the new administration came on board coupled with the rising popularity of bitcoin adoption this year.
Sadly, most of these enthusiasts have been disappointed because the reverse has been the case. Crypto policies enacted have been strict while some traditional investors have been cautioning investors about investing in bitcoin.
Even though several financial institutions including popular ones such as JP Morgan and Morgan Stanley have succumbed to their client’s demand for a bitcoin investment service, policymakers in the country remain passive about the crypto market space.
While Switzerland’s Basel Committee on banking supervision has acknowledged bitcoin as an asset class, it also created a 1.3% risk weightage policy. This risk weightage policy means that banks that offer bitcoin-related services will need to have the cash equivalent of their bitcoin investments.
Bitcoin Exchange-Traded Funds (ETF) Proposals Will Still Take a Backseat
Several finance companies have filed a combined eight bitcoin ETF proposals, two are pending already. Unfortunately, SEC’s 2021 regulatory agenda means that the remaining ETF proposals will remain pending.
While us financial regulators are still dragging their feet regarding bitcoin ETFs, Canada has approved theirs. Canada even approved Ethereum ETFs and is enjoying the benefits of doing so. The purpose group holds the record of owning the first bitcoin ETF and the success of this first bitcoin ETF raised the hopes of other financial institutions in the country who also wanted to have their bitcoin ETFs.
However, the leading authorities in the U.S. are uninterested in approving any bitcoin ETF. When the current SEC Head, Gary Gensler assumed his position, many crypto enthusiasts hoped that he would allow fairer crypto policies than his predecessor, Jay Clinton. But there hasn’t been much difference in their approach to crypto matters thus far.
The Focus of SEC’s Regulatory Agenda
Instead of bitcoin or other cryptocurrencies, the focus of SEC’s 2021 regulatory agenda will be on providing policies for special purpose acquisition companies (SPACs). These policies will cover short sale disclosures, money market reforms, gamification of trading platforms, and other sundry issues.
However, Gabriel Shapiro, a lawyer has told the media that SEC might discuss crypto when it discusses gamification of trading platforms. Also, Hester Peirce’s “safe harbor” proposal can be discussed during the first stage of SEC’s agenda – the Pre-rule stage. The proposed rule and the final rule are two other stages of SEC’s agenda.
Under Hester’s proposal, token projects that are considered as Securities are given a “time-limited” exemption” from filing with the commission. When Gensler appeared before the house financial services committee last month, he suggested that Congress would need to be involved in any crypto-related oversight since these virtual assets aren’t considered as Securities yet.
Gensler said, “there is no protection against fraud or manipulation in the crypto industry because no one regulates these crypto exchanges.”
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