The future of digital currencies is a pressing question right now, hinting at the grey area where technology, commerce, and regulations collide. The U.S. Securities and Exchange Commission (SEC) has evidently acknowledged this inevitability, focusing its overseeing powers on the crypto-verse.
Highlighting this, SEC Chair Gary Gensler discussed the need for new rules, aligning with the technological and business demands of the 21st century. His statement in the Sept. 27 hearing referred to an urgent call for check and balances on trending sectors like artificial intelligence and cryptocurrencies.
Gensler raised concern about the compliance of the crypto market to the securities law. This is particularly so considering his indication that most cryptocurrencies were subject to the law, presenting a requirement for intermediaries like exchanges and brokers to adhere to the same.
While potential investors and issuers deserve protection, the SEC Chair suggests a general lack of compliance within the industry. This non-adherence has led to enforcement actions and led the SEC to target the crypto market with its rule-making apparatus.
The SEC’s decision to update its rules concerning crypto assets seemed a balanced approach. Furthermore, the SEC proposed rules compelling firms to analyze conflicts of interest due to their use of predictive data to interact with investors. Hence, the regulator seems keen to level the playing field, balancing tech advancements, and the need to fortify its governance.
Being responsive to an emerging sector can be a tough task, however. Some might argue enforcement actions tend to dampen innovation and adoption, especially in the United States, where future tech sectors like artificial intelligence and digitized assets are booming.
It’s quite apparent that Grayscale conceded in the face of these regulations, abandoning the rights to Proof-of-Work Ethereum tokens due to a market liquidity concern, arguably a direct fallout of the imposed regulation.
Furthermore, encrypted platforms like Coinbase and Binance.US, coming under the regulatory hammer for supposed securities laws violations, underlines the question of achieving a winning equation between governance and innovation.
From an optimistic lens, the SEC’s steps can be seen as an attempt to guide the crypto-phenomena from a potentially harmful Wild-West scenario to a more pro-customer system. Yet many argue that regulators must remain cautious, ensuring that while instilling a check-and-balance approach, they do not pull the e-brakes on technological and financial evolution.
The future, thus, is a fascinating panorama, with stakeholders keenly watching the outcome, perhaps holding their very breath until the dust settles on this digital-tug-of-war. However, it unfolds, the impact on the crypto world and its millions of adherents could be tangible, even life-altering for some.
Source: Cointelegraph
