Sunday, September 25, 2022

SEC Chair Unhappy About New Crypto Bill

SEC Chair Gary Gensler is not the slightest bit happy about the prospects of a recent crypto bill which was jointly introduced by Senators Cynthia Lummis and  Kirsten Gillibrand. This is according to a Wall Street Journal (WSJ) report that was published earlier on Tuesday.

The WSJ claims that Gensler is worried about the bill undermining existing market regulations. And additionally, he also believes that the bill can potentially impact the broader capital market, albeit, in a negative way.

SEC could lose jurisdiction over the majority of crypto

For all intents and purposes, Gensler’s outcry appears to have stemmed from the possibility of the SEC losing regulatory power over crypto.

Recall that the Lummis-Gillibrand bill, which was introduced in early June is looking to classify most cryptocurrencies as commodities. And if this happens, then it means that crypto would be regulated by the Commodity Futures Trading Commission (CFTC).

But of course, the CFTC has a softer stance on the crypto industry. So, one could easily understand why according to the WSJ report, Gensler is looking to further discuss his worries about the crypto bill with lawmakers. Although before now, Gensler has always been clear about his concerns about cryptocurrency exchanges listing unregistered securities.

More on the crypto bill

It might be noteworthy that while the crypto bill primarily seeks to classify cryptocurrencies as commodities, there are other added provisions in the bill.

While the bill makes room for investor protection, it also gives strong requirements that must be met by stablecoin issuers if they must do business.

Interestingly, the bill may likely not pass this year, because it must first pass through a series of relevant committees. Only after this, may the Senate then hold a full vote on it.

Senator Lummis responds

Meanwhile, Senator Cynthia Lummis, one of the duo behind the crypto bill has responded to the SEC’s seeming apprehension.  On Tuesday, she insisted via a Twitter post that it is time for an upgrade to the regulations. She wrote in part:

“…We are regulating this 21st century technology with 20th century regulations. It’s time for an upgrade, and the Lummis-Gillibrand plan accomplishes that.”

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