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Prominent crypto investment firm Paradigm resists recent actions by the US Securities and Exchange Commission (SEC) challenging its authority to regulate secondary markets for crypto assets. Increased regulatory action, extending now to exchanges operational in secondary markets, indicates an expansion of SEC’s authority. Paradigm criticizes this as inconsistent regulation, potentially damping the entrepreneurial spirit of crypto exchanges.

US Senators Cynthia Lummis and Kirsten Gillibrand are to propose a new legislation known as the ‘Responsible Financial Innovation Act’, aimed at regulating cryptocurrencies and digital assets. The bill plans to classify most cryptocurrencies as commodities and enforce crypto exchanges to store consumer assets in third-party trusts, enhancing security. Critics argue it may also create unintended consequences.

“Paradigm’s Special Counsel Rodrigo Seira criticizes the SEC’s recent actions against secondary crypto markets and U.S.-based crypto exchange Bittrex as overstepping jurisdiction. Seira argues crypto-assets do not fall under the SEC’s purview, highlighting the need for clearer regulatory framework.”

U.S. Senator Thomas Tuberville has urged an investigation into special-purpose broker, Prometheum, which recently got federal permissions to offer crypto trading. The probe stems from the suspicion that Prometheum may have violated U.S. securities laws or provided dubious testimony to Congress, hence affecting investor protection and legislative process integrity.

Mark Cuban and an ex-SEC official have weighed in on the future of cryptocurrency regulation amidst ongoing shifts in the industry. Cuban is critical of the SEC’s current approach, advocating for potential regulations including dedicated registration processes for cryptocurrencies. Contrastingly, ex-SEC official John Reed Stark criticizes Central Bank Digital Currencies for potential global financial risk, cybersecurity issues, and possible conflicts.

“Anthony Scaramucci criticizes former FTX head, Sam Bankman-Fried, whose actions allegedly led to a regulatory crackdown on cryptocurrency. He suggests current regulations gravitate towards ‘prosecutorial oversight’, hindering innovation. He praises Canada’s approach, involving industry players in forming guidelines, and calls for increased transparency.”

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House Financial Services Committee Chair Maxine Waters proposed the Digital Asset Market Structure bill, offering US-based digital asset exchanges a pathway for SEC registration, seeking regulatory clarity for the crypto industry. The legislation aims to approve digital securities, commodities, and stablecoins for trading while providing guidelines to distinguish between crypto-based securities and commodities.

US lawmakers introduced the “Digital Asset Market Structure” bill, proposing a comprehensive framework for digital assets. California Rep. Maxine Waters seeks feedback on the bill’s potential impact on the regulatory landscape and investor protection, highlighting the importance of balancing innovation and investor security.

This article discusses the current market structure discussion draft for crypto legislation, proposed by House Republican Committee leaders Patrick McHenry and Glenn Thompson. While it faces political challenges, it could serve as a foundation for future bipartisan crypto regulation.

The US House Oversight and Investigations Subcommittee, led by Rep. Bill Huizenga, has criticized the SEC for insufficient information on former FTX CEO Sam Bankman-Fried’s charges and arrest. This raises questions about regulation in the emerging cryptocurrency industry, stirring debates between proponents of stricter regulation and supporters of blockchain technology and markets.

The Ripple vs SEC lawsuit reveals contrasting opinions within the crypto community, reflecting the unpredictable outcome of the case. As the verdict approaches, pro- and anti-XRP factions express their views, challenging investors navigating current market conditions. Conduct thorough research before committing to cryptocurrency investments.

The SEC is potentially targeting decentralized finance (DeFi) and stablecoins, including Tether (USDT) and USD Coin (USDC), in its enforcement crackdown, according to a Berenberg report. Stablecoins, essential to the DeFi ecosystem, have raised national security concerns due to weak sanctions and money laundering controls. The SEC aims to weaken DeFi’s capacity to rival regulated exchanges and lenders.

The SEC has identified 68 blockchain tokens, including Solana’s SOL and Cardano’s ADA, as securities, affecting over $100 billion assets. The classification raises questions on users’ access and potential regulatory constraints on centralized exchanges, while highlighting the challenge in balancing regulations and blockchain technology’s open nature.

Former CFTC Chairman Christopher Giancarlo and crypto advocate Jim Harper discuss the SEC’s recent crackdown on Coinbase Exchange, highlighting the need for regulatory clarity in the U.S. crypto industry. The pursuit of a positive regulatory environment is crucial in propelling the market forward and fostering innovation.

The major questions doctrine, which requires explicit congressional approval for regulating areas of significant importance, may provide relief for Binance and Coinbase amidst SEC scrutiny. This legal aspect could potentially challenge the Chevron doctrine, which grants regulatory agencies broad discretion, and promote regulatory clarity for the cryptocurrency industry.

The era of trading cryptocurrencies as non-securities may be ending, says Itai Avneri, COO at INX. With legal implications affecting exchanges, a focus on categorizing cryptocurrencies within the financial landscape is crucial for compliance with regulatory guidelines and balancing innovation with financial security.