Top Financial Regulators Call for Tighter Licensing of Crypto Firms

[ad_1]

Several key financial regulators in the United States raised issues with cryptocurrency companies and called for tougher licensing at a Friday meeting of the Financial Stability Oversight Council, a committee of U.S. financial regulators.

“It’s so important to bring intermediaries as well as issuers of cryptocurrency tokens into compliance,” Securities and Exchange Commission Chairman Gary Gensler said, adding that he thinks many crypto firms aren’t keeping up. Nothing in the crypto markets is inconsistent with the securities laws but the risk of this speculative, volatile and what I believe is largely non-compliant market that does not comply with our existing laws puts investors at risk.”

The SEC, including current Chairman Gensler and former Chairman Jay Clayton, have long maintained that most digital assets are securities and fall under securities laws.

Crypto exchanges operating in the United States currently do so primarily through various state money issuer registrations. Another FSOC member, Rohit Chopra, director of the Consumer Financial Protection Bureau, argued that the status quo is inadequate for crypto and other fintech firms, especially those that hold customer deposits without health insurance. Federal Deposit Insurance Corporation, citing the recent collapse of FTX.

The failure of such a venture could lead to millions of American consumers becoming unsecured creditors of bankruptcy assets, similar to the experience with FTX,” he said, referring to the crypto exchange collapse. the long-term stability of these types of businesses.

Treasury Secretary Janet Yellen referenced an October report from the FSOC, noting that crypto asset activities could pose a risk to the US financial system if their interconnections with the traditional financial system or global scale were to grow without membership or being associated with appropriate regulation.

Regulators also want to assess whether the way certain digital asset exchanges are structured “can or should be adapted to existing laws and regulations”, according to a summary of the 2022 annual report they unanimously approved today.

This report also calls for increased enforcement of current financial laws as they relate to digital assets, tackling “regulatory arbitrage,” and for Congress to pass new legislation to give regulators more direct power over spot markets for bitcoin and other digital assets that are not. considered titles.

2022 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended for use as legal, tax, investment, financial or other advice.

[ad_2]