Crypto Regulation: JP Morgan vs. SEC

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US bank JP Morgan is making its voice heard asking the US government for regulation of the crypto industry after recent tyrannical pasts by the SEC.

The risk, according to the banking giant, is that an industry that deals in billions of dollars will move to other markets outside the United States.

Let’s see all the details together.

JP Morgan: If the US Fails to Regulate Crypto, the Industry Will Move Abroad

JP Morgan doesn’t seem to have taken too well the latest lawsuit filed by the SEC against cryptocurrency exchanges, asking the government for dedicated regulation of the industry.

So, the world’s largest bank with a market capitalization of $413 billion has taken sides, supporting the crypto industry towards a US-centric future.

In particular, following the attacks of the Securities and Exchange Commission against Binance and Coinbase, it appeared necessary to establish a legislative framework to prevent a flight of cryptographic capital abroad.

In a research report published last week, JP Morgan said that after what happened, there was an urgent need to develop:

“a comprehensive framework on how to regulate the crypto industries and the relative responsibilities of the SEC versus the Commodity Futures Trading Commission (CFTC).”

The team of financial analysts led by the bank’s legal director, Nikolaos Panigirtzoglou, maintains that it is not easy to decree with absolute certainty which cryptocurrencies fall under the nomenclature of “security”, if used in SEC lawsuits.

In particular, the federal commission would classify as securities many of the major large-cap cryptocurrencies listed on a long list of exchanges operating in the United States, which would complicate their operational situation.

Many crypto exchanges and service providers offering their services on US soil have backed down for fear of legal punitive shipping.

Prominent names such as Crypto.com, Robinhood, and Etoro stand out among them.

Binance and Coinbase, on the other hand, which have far more resources and legal means than other competitors, have imposed themselves by asking the courts to hear their arguments, rejecting the accusations of the SEC.

In recent days, the courts appear to have given the crypto industry a point, after rejecting a request by Gensler to freeze assets held by Binance.US.

Additionally, a warning was given to the federal agency to respond to Coinbase’s request for regulatory clarity of its claims, which will now have to submit a formal explanation within 120 days.

In any case, until clear and transparent solutions are found for crypto traders, business will most likely start moving faster and faster to different legislations and decentralized entities.

The SEC’s intention may be just that: it doesn’t know it can win the battle, but it wants to fight it as long as possible to inflict permanent injury on the industry, such as the loss of investor confidence.

The SEC does not want crypto regulation in the United States

Unlike JP Morgan, the SEC seems intent on blocking the formulation of dedicated regulation for the crypto industry by going through legal channels and relying on old laws that are over 90 years old.

Although sometimes ridiculous, the intention of the United States Securities and Exchange Commission seems to have been carefully planned: to hinder the advancement of the crypto industry in order to facilitate the entry of the CBDC.

Behind these acts of violence, there should be an explanation anchored on the political front.

In this regard, many have expressed their opposition by calling for the expulsion of Gary Gensler from his role as SEC Chairman.

Among them, two American representatives, Warren Davidson and Tom Emmer, formally submitted to the House a law called the “SEC Stabilization ACT” calling for the dismissal of the person and the reform of the entire federal agency.

The former of the two mentioned politicians said the following in a statement:

“US capital markets must be protected from a tyrannical president, including the current one.

Emmer reportedly called Gensler a “bad faith regulator,” pointing out the contradictions in his actions to the common interest of investors.

The proposed bill, in addition to reforming the commission, would create the conditions for a departure of the political sphere from the regulatory sphere by preventing any party from having a majority in the commission and adding the position of executive director .

The pressure on the SEC Chairman is getting more intense as the days go by.

Since November, Gensler has been forced to review its actions due to its inability to handle FTX’s $8 billion financial crash in advance.

But now, following his counter-response, he has come under the spotlight again after it emerged that he had a track record as a compliance candidate at Binance.

There has been speculation in recent days that the SEC Chairman started the whole mess just to retaliate against the rejection of CZ, CEO of the cryptocurrency exchange.

The white collar has been cornered and can no longer commit missteps if he wants to save his tenure.

Crypto enthusiasts worldwide await news of the case and can’t wait to read the SEC’s reasoning to Coinbase’s request for further explanation.

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