- US Representative Maxine Waters has requested insights from SEC Chair Gary Gensler and Treasury Secretary Janet Yellen on a legislative proposal related to digital assets, which could provide guidelines for the US crypto exchanges to register with regulators.
- The result of this dialogue, alongside the impending SEC lawsuit verdict against Ripple, could significantly shape the future of the crypto market, potentially setting legal precedents in the securities versus commodities debate.
In what is turning out to be a defining moment in the crypto landscape, US Representative Maxine Waters has sought the perspectives of Securities and Exchanges Commission (SEC) Chair Gary Gensler and Treasury Secretary Janet Yellen on a legislative proposal. This proposal seeks to overhaul the market structure of digital assets, an area of the financial world that has recently seen a considerable amount of controversy and ambiguity. The proposition is expected to establish clear guidelines and a framework for the crypto industry, ultimately enabling US-based crypto exchanges to register with the SEC.
The interest from Waters follows recent attempts by the House Financial Services Commission and Agriculture Committee to introduce legislation that seeks to provide clarity in the rapidly evolving world of crypto. Gensler, in particular, has faced public backlash after characterizing all cryptocurrencies, with the exception of Bitcoin, as securities, making his consultation critical in this legislative endeavor.
The draft bill discussion comes amidst escalating legal confrontations involving major crypto exchanges, notably Coinbase and Binance. Both exchanges were recently slapped with lawsuits alleging securities law violations, highlighting the need for revised regulations.
In pursuit of clarity and sound policymaking, Waters has invited Gensler and Yellen to brief the House Financial Services Committee members on their views of the proposed legislation. They are expected to submit their written responses by the end of June 2023, further shedding light on the potential impact of the new regulation on the SEC’s existing authorities, its mission, and its ability to protect investors and maintain fair, orderly, and efficient markets.
This draft bill and the ensuing dialogue are not the only significant developments in the crypto world this year. A Summary Judgment in the SEC lawsuit against Ripple is anticipated to be delivered before the end of 2023. The outcome of this lawsuit could set a precedent in the ongoing debate over whether crypto assets should be classified as securities or commodities, further influencing the trajectory of the crypto market and regulatory framework.
Finally, the Digital Asset Market Structure proposal, co-signed by Representatives Patrick McHenry and Glenn Thompson, has been spotlighted as a pivotal oversight proposal within Congress. This draft legislation aims to greenlight digital securities, commodities, and stablecoins for trading, providing much-needed guidance to distinguish a crypto-based security from a commodity. This proposal underlines Democrats’ attempts to steer a bill that could potentially bring greater regulatory clarity to the burgeoning crypto industry, despite certain unpopularity within the party.