The push for “regulatory compliance” in the crypto world by the US Securities and Exchange Commission (SEC) appears to be in full swing. The most recent victim to fall victim to its aggressive enforcement measures is the now-bankrupt crypto exchange, Bittrex. Following allegations of operating as an unregistered securities exchange, Bittrex agreed to a financial settlement of $24 million; however, the court documents reveal no admission or denial of these charges. This can be seen as an acceleration of SEC’s enforcement action to bring many disruptive crypto firms under the regulatory umbrella.
It’s pertinent to mention here that Bittrex is not the first one being rigorously vetted by SEC. Kraken had to stop its crypto staking services in the US after settling with the SEC for $30 million. Meanwhile, Stablecoin firm Paxos was stopped from issuing Binance USD (BUSD) facing similar allegations of dealing in unregistered securities.
The SEC’s increasing attention towards crypto regulation is seen by some as a response to the high-profile crypto calamities of 2022, which include the notorious collapse of the Terra ecosystem and FTX. Interestingly, SEC’s Chairman, Gary Gensler, has expressed his views that most cryptocurrencies, barring Bitcoin, are securities. However, critics argue that this aggressive regulation implementation is thwarting investment and innovation in the crypto industry and pushing it to more amiable jurisdictions like UAE or UK.
A bright spot could be seen on the horizon as 2024 is being touted as a significant year for US crypto regulations. There is wide speculation that major legislation might come through and form definitive outcomes in the SEC’s lawsuits against major exchanges like Coinbase and Binance. SEC’s decision on spot Bitcoin ETF applications is keenly awaited, which could change the landscape, given the past history of refusal.
Despite these developments, the United States Congress has been largely indifferent. A recent Republican-sponsored bill to draft rules for issuing USD-pegged stablecoins managed to get out of the House Committee on Financial Services, raising hopes for a potential vote in the Congress. However, the possibility of it making through the Congress and getting the President’s signature seems bleak due to a lack of bipartisan agreement.
In a nutshell, the year 2024 seems to harbor substantial developments in the US crypto regulatory landscape but hurdles due to aggressive enforcement by SEC and Congress’s indifferent attitude are hurdles that the tech industry might need to overcome.
Source: Cryptonews
