Conversation around cryptocurrency regulation are not new but towards the end of 2022 and now in 2023 the regulatory environment has seemed to have intensified. It seems the Security and Exchange Commission (SEC) has launched a major offensive to regulate the cryptocurrency industry. After 2022 scandals and the terrible bear market the new offensive of U.S. regulators does not feel like a conversation as it had in the past this feels like a crackdown.
The SEC seems determined to impose some type of order with an iron fist on the sector. For those of use that have been in the space regulators have taken a laissez-faire approach which many believe to be the cause major financial scandal and bankruptcies of the empires like FTX, Luna and many more caught up in tidal wave of wrong doing which lead to the loss of million for every day retail investors.
The SEC now seems determined to show that there is a sheriff in town are trying to throw their weight around. The federal agency is targeting more coins and picking fights with major exchanges.
I just saw an article about how the SEC is accused of ‘back door’ labeling of crypto as securities in Coinbase insider trading case They want to put all cryptocurrencies in the securities category, which would give it a lot of power over the industry. They are going to great lengths to make their case and some might say overstepping their bounds to make such a claim.
By SEC definition, a security is an investment of money, in a common enterprise, with a reasonable expectation of profit derived from the efforts of others. The Howey Test sets out what is an investment contract and would therefore be subject to U.S. securities laws. They are now targeting coins under these regulation and test. This has been one of the fundemtal arguments around the Ripple (XRP) SEC case which has been going on for years at this point.
If the SEC gets their way tokens that have not been considered securities will be reclassified and no longer be able to escape strict regulatory supervision and will be required to follow the same set of rules of financial transparency and disclosure as companies listing stock. This would include the rules of disclosure, risk management, and minimum liquidity. It also means crypto would be under the watchful eye of Gary Gensler, who has been a critic of the space. I once has hope for Gary and the SEC foster a conversation around common sense regulation of the space but I feel like that will not happen. When I have written on the subject in the past that optimism probably biases my posts, but now the rosy colored glasses are off and I fear that the SEC intervention may unforeseen consequences and destabilize the space even more.
Regulation in the stock market is a joke. Yes, it's stricter than the crypto space, but it's riddle with loopholes, grey areas and manipulation. I think the SEC is kidding itself if regulation actual helps the little investor. i make the argument all the finical policies in place are to hurt small investors and favor larger institutions.
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It's like a cat and mouse game. They try to regulate too many things in my opinion. Let crypto have a break !
Unfortunately, I think if they do manage to classify them as securities, being able to undo that is going to be a uphill battle. Just look at the whole Internet and the idea of broadband communications. They have been fighting for years to reclassify that and it just isn't happening. We had it for a short time, then the new regime came in and moved it back. I am guessing something like that might happen here though it may be more destructive.
Great point, it will take forever to change it back... I don't even know all the implications, but I heard staking is going to be a sticking point for regulators. I also fear that it could impact Hive even though we are truly decentralized.
Yeah, staking seems to be the next big thing after DeFi so who knows what will be next if they squash that!
DeFi poses more rusk to crypto than coins. The derivatives markets mixed with leverage and liquidity issues are what cause a lot of last year's headaches.
I know, but that seems to be where people were flocking. Now staking and stables. They are just going after low hanging fruit.
These are just useless steps to stop the growth of Crypto, because they fear crypto will replace their traditional way of exchanges money, which give them control over people money. Let them bark, just keep growing and developing.
I like the confidence that that this is all noise. I think regulation is a big factor that will shape the landscape for the future.
Crypto will overshadowed all the traditional exchange and in near future all governments will regulate its mode of exchange because it will happen only by crypto flow.
Keep faith on it and future is ours.keep update us and stay blessed.
I just keep DCA'ing.
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First of all I would like to say here that luna and owner of FTX should be severely punished for what they have done. I would like to give this example when the election is going on, every party member and party owner comes there to take it and when they leave, they don't even set foot there for five years. Whoever has money neither can catch him nor punish him, these are just things that will continue like this for the rest of his life. Sec will keep on saying that we are making our rules very strict so that no one does this but then they will also disappear in a way when a new case like this comes up then what to say. He has come and said. A crypto investor must understand that the money he invests carries a huge risk. That is why before investing one should understand the project well and get every information about it and then put money into it.
I guess the big question we should ask ourselves is can the government really control crypto
It's always a game of control and I am not surprised. In the end, I think we will have to wait till the lawsuits decide what is actually right or wrong but that would take years. I don't like it but there isn't much I can do about it either.
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