When it comes to shaping the future of crypto regulation in the U.S., the spotlight is currently on Senator Sherrod Brown who, during a recent Senate hearing, expressed his stern view of the industry as teeming with deceit and exploitation. Brown`s stance was amplified by Gary Gensler, the Chair of the Securities and Exchange Commission (SEC), who has a deep lineage in Wall Street. His characterization of misconduct in the crypto sector exceeded any he has witnessed before.
Brown, leading the Senate Banking Committee, emphasized the troubling elements found in the industry — inadequate disclosure, interest conflicts, and high-risk bets with funds that are supposed to be secure. He pointed out that such malpractice is ubiquitous in crypto, with FTX being one of the worst perpetrators. Without Brown’s approval, any stablecoin bill or comprehensive oversight of the U.S. crypto market seems unlikely for the foreseeable future. Despite the industry viewing the SEC’s crackdown as “regulation-by-enforcement”, Brown further applauded the commission’s efforts.
Throughout the hearing, Gensler maintained his skepticism, stating the glaring misconduct in the industry as “daunting”. Senator Cynthia Lummis, known for favoring digital assets, engaged with Gensler about SEC’s bulletin advising public companies to reflect their crypto assets in the balance sheets, which, she argues, could dislodge regulated banks from the business.
However, Gensler clarified that the guidance was issued considering crypto assets aren’t easily isolated, unlike stocks and bonds, and he maintained that how those assets are backed isn’t the SEC’s purview.
While Gensler’s SEC appears to focus on enforcement actions against the likes Binance and Coinbase, they have been active in pursuing rule modifications with potential impacts on digital assets. Oddly, such impacts are often linked to holding crypto companies accountable to the existing U.S. securities laws.
Legislative actions elucidating specific rules for the industry have been under consideration, contradicting Gensler’s perspective of the sufficiency of the current laws. However, despite the clearance of two bills from the House Financial Services Committee and proposals from various senators for alternatives, Brown has so far shown no interest in addressing them. The standoff between different perspectives yields a degree of uncertainty and challenges the path to a well-aligned regulatory ecosystem for crypto assets.
Source: Coindesk
