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HomeNewsRipple CLO Cheers Senate Decision on Cryptocurrency Regulation

Ripple CLO Cheers Senate Decision on Cryptocurrency Regulation

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  • US Senate rejects SEC rule requiring banks to report cryptocurrency holdings on balance sheets, citing overregulation concerns.
  • Ripple CLO Stuart Alderoty applauds Senate’s decision, views it as a stand against SEC Chair Gary Gensler’s overreach.

The US Senate recently voted to reject a Securities and Exchange Commission (SEC) rule that would have impacted custodial services for cryptocurrencies within regulated banks. Stuart Alderoty, the Chief Legal Officer at Ripple, supported the Senate’s decision, labeling it as a significant pushback against what he views as excessive control by SEC Chair Gary Gensler.

The rule, known as SAB 121, aimed to require banks to list customers’ cryptocurrency holdings on their balance sheets. This proposal faced opposition from the banking and cryptocurrency sectors, which argued that such a requirement would complicate custodial services and negatively influence banks’ financial statements because of the fluctuating value of cryptocurrencies.

Industry leaders, including Michael Saylor, co-founder of MicroStrategy, approved of the Senate’s decision, emphasizing the importance of protecting cryptocurrency owners’ rights.

SEC Commissioner Hester Peirce, often referred to as “Crypto Mom” due to her supportive stance on digital assets, also expressed disapproval of the SEC’s inconsistent regulatory measures concerning custodial services for digital assets. She aligned with the broader industry view that the SEC’s approach could restrict sector innovation.

The Senate’s vote displays bipartisan support for a balanced approach to regulating digital assets. This growing agreement among US lawmakers could positively shape forthcoming legislation, including potential regulations on stablecoins, thus fostering growth and broader acceptance of cryptocurrencies.

The decision to overturn the SEC’s rule is perceived as a preventative step against overregulation that might stifle innovation and infringe upon the rights of digital asset owners. Industry figures like Alderoty see this as a move toward a more deliberate and informed regulatory approach to cryptocurrencies.

In a related critique, John Deaton, criticized both the SEC and Senator Elizabeth Warren for allegedly placing political agendas above investor protection. He claimed that SEC Chairman Gary Gensler’s interactions with certain individuals, despite those individuals facing legal issues, did not adequately protect investors. 

Deaton pointed to his own legal successes, including a favorable judgment from a judge appointed by former President Obama, as evidence of his dedication to consumer protection.

Deaton further criticized the SEC for what he sees as regulatory inconsistencies, exemplified by actions against companies like Coinbase after initially assisting them. He accused Senator Warren of using the SEC to advance her political goals, particularly through her focus on regulating stablecoins, which he argued shifts attention from more urgent issues facing her constituents in Massachusetts.

This ongoing debate highlights the tension between the need for effective cryptocurrency regulation and the desire to foster innovation within the sector.

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Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: info@ethnews.com Phone: +49 160 92211628
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