• The US Securities and Exchange Commission (SEC) is regulating the crypto market by filing lawsuits against exchanges such as Binance and Coinbase.
• SEC’s whole claim to govern the sector relies heavily on considering cryptos securities.
• The House Committee on Agriculture recently held a meeting which could potentially take over CFTC’s jurisdiction of crypto assets from SEC.
The US Securities and Exchange Commission Regulations on Crypto Market
The US Securities and Exchange Commission (SEC) is regulating the trillion-dollar crypto market by enforcement. The pinnacle of the agency’s strategy to eradicate the sector as a whole came with recent lawsuits against the largest crypto exchanges, Binance and Coinbase. SEC Chair Gary Gensler has been suing various crypto firms since taking office in 2021. According to China-based reporter Colin Wu, the agency brought 760 enforcement actions in fiscal year 2022 with payments totaling $6.439 billion – both highest in history.
SEC Mandates Cryptos As Securities
The SEC’s claim to govern the crypto sector relies on deeming digital assets securities, not currencies or commodities. In order for them to have legal action authority, they must consider altcoins securities. A currency is a store of value, unit of account, and medium of exchange while a security is a tradable financial asset with monetary value.
House Committee On Agriculture Meeting
The House Committee on Agriculture held a meeting titled “The Future of Digital Assets: Providing Clarity for Digital Asset Spot Markets” on June 7th, where they discussed a draft bill regarding crypto assets as commodities which could potentially take over CFTC’s jurisdiction from SEC Chairman Rostin Behnam commented that this action was why they were holding their hearing today – “Regulation by enforcement is not an appropriate way to govern a market.”
Securities vs Commodities Regulation
Currently, if cryptos are deemed securities then it falls under SEC’s regulation but if it gets labeled as commodities then it would fall under Commodity Futures Trading Commission (CFTC). This would mean that CFTC has more authority than the SEC when it comes to regulating cryptocurrencies and other digital assets.
Conclusion
The US Securities and Exchange Commission (SEC) has been actively trying to regulate the trillion-dollar crypto industry through lawsuits against exchanges such as Binance and Coinbase while also relying heavily on classifying cryptos as securities rather than currencies or commodities in order for them to have legal action authority over these digital assets markets However, if Congress passes this new draft bill proposed by The House Committee On Agriculture then all that could change drastically as CFTC might be given more power over these markets instead of SEC taking control with its own regulations
