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The SEC announced this year’s regulatory agenda, and while it includes plans to investigate cybersecurity and regulate short selling, there was no mention of Bitcoin or cryptocurrencies in general.
Commissioner Gensler and the crypto markets
Recent comments from SEC Commissioner Gensler and CFTC Commissioner Berkovitz shed light on why the regulator plans to avoid regulating the cryptocurrency space this year.
In a May interview with CNBC, Gensler indicated that while he believed greater protections were needed for investors in the crypto space, there was currently a gap in our system that needed to be addressed by some sort of federal regime.
But Gensler also indicated that crypto regulation is something that needs to be taken up by Congress, according to remarks made in a speech to the House Committee of Appropriations. Gensler discussed the need for the SEC to work with Congress to better understand crypto exchanges, where these commodities, at times, are traded on the platform.
Gensler also noted that the SEC must remain technologically neutral when it comes to market innovations.
Commissioner Berkovitz and DeFi
CFTC commissioner Berkovitz also recently pointed out the dangers of the DeFi space and went so far as to question its very legality.
DeFi is a catch-all term for a wide range of financial applications based on cryptoassets or blockchains that do not rely on traditional intermediaries such as exchanges, brokerage platforms, or banks.
This lack of intermediaries creates exponential risk for investors. Berkovitz said in his recent comments: There is no middleman to monitor the markets for fraud and manipulation, prevent money laundering, protect deposited funds, guarantee the performance of counterparties or make clients unharmed when processes fail.
See also: Commissioner Berkovitz questions DeFi’s legality
Further, Berkovitz explained that futures contracts must be traded on a designated contract market (DCM) authorized and regulated by the CFTC, reiterating that it is illegal for anyone to enter into swaps that are not subject to the rules of the CFTC. DCM.
DeFi Markets and Platforms are currently not registered as DCM or SEF.
Commissioner Peirce and the responsibility of the SEC
At the end of May, SEC Commissioner Hester Peirce, speaking independently to Coindesk, indicated that the crypto could force the SEC to speed up the modernization of its custody rules, which he believes should be done by all. levels.
Peirce made sure to clarify that while the language that comes out of the SEC often seems to be cautious, the agency ultimately isn’t trying to pass judgment.
Crypto assets are currently classified as commodities, which means they are outside the jurisdiction of the SEC and, for now, will likely remain unregulated by the Commission.
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