Sunday, December 8, 2019

SEC Ready to Prioritize Regulation of Cryptocurrencies and Exchanges in 2019

Adedamola Bada
I'm Damola, a computer engineer from Obafemi Awolowo University. A crypto enthusiast, marketer, and writer who is seeking to achieve career excellence through hard work and positive contribution to the organization that aspires for excellence. Contact me on [email protected]

The United States Securities and Exchange Commission (SEC) is once again displaying its readiness to ‘understand’ cryptocurrencies while trying to regulate the industry to the best of its ability.

Historical Friction

The US SEC is the official financial watchdog for exchanges, derivatives, and securities in the country, a collection of terms which for some reason manage to sweep some digital currencies under its umbrella—emerging and established. The SEC has crashed down on many cryptocurrency startups and had its run-ins with has many cryptocurrency institutions and establishments as possible. Ripple, for one, has been one of the major coins battling against its court ruling as a security, a move that would incur large exorbitant costs that could just have been easily avoided if the coin emerges from the class action lawsuit unscathed.

Strengthening the Cryptocurrency Industry

The SEC is now showing interest in strengthening an industry that is barely a decade yet and planning to protect the institutions and its investors by laying more velar rules and eliminating traces of ambiguousness whatsoever. Due to the complex technological foundation and highly mathematical background of digital currencies, the regulatory body has been a swell time classifying the emerging institutions and their coins, but an authoritative start to 2019 that has seen it introduce at least four new concise cryptocurrency regulations has shown the body’s willingness to get involved this year.

The period of labeling cryptocurrencies as a nascent technology is over, and after ten years of existence, SEC has said it would be strengthening the cryptocurrency industry to protect investors from risk and ensure ICO scams are reduced and severely penalized.

The lack of a legal spine or regulatory framework has made the cryptocurrency sector an inviting place for scammers and criminals to launch nefarious activities, and till now more has comfortably slipped into the air without traces than the few that have been caused. The better the crypto-assets sector develops with more regulations and unification in place, the harder it would be for party-spoiling imposters.   

Timothy Massad, the former chairman of CFTC, has explained in the just-published paper—“It’s time to strengthen the regulation of crypto-assets” – why the cryptocurrency industry cannot be disregarded anymore and considered a smaller industry, claiming that the cryptocurrency sector’s influence has since grown massively over the years.

“Crypto institutions are small compared to banking, securities and derivatives markets, but they do not operate in isolation; they have many connections with the broader financial system. A cyber-attack on a crypto institution could lead to collateral damage elsewhere.”

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