The SEC Chair and the Commodity Futures Trading Commission (CFTC) made positive statements about the cryptocurrency market!
A new step is being taken in the legal approach to cryptocurrency under U.S. President Donald Trump. After the Clarity Act was unexpectedly suspended in the Senate, U.S. regulators are preparing to issue regulations within their existing authority to support the development of the cryptocurrency sector.
In a joint interview with The Wall Street Journal, Chairman of the U.S. Securities and Exchange Commission (SEC) Paul Atkins and Chairman of the Commodity Futures Trading Commission (CFTC) Michael Selig expressed their readiness to cooperate in regulating cryptocurrency. The two agencies are expected to sign a memorandum of understanding (MoU) to clarify oversight areas in the cryptocurrency market.
Mr. Atkins stated that long-term regulatory compliance is a priority, adding, 'I hope the bill will pass this year, but we can also continue with existing authorities.' Regulators indicated that the regulations issued will align with future laws.
The delay in the Transparency Act has exacerbated instability in the cryptocurrency and banking sectors. The bill, which is expected to be reviewed by a Senate committee, was postponed after Coinbase, the largest crypto exchange in the U.S., withdrew its support due to a dispute with banks over stablecoin rewards. CEO Brian Armstrong's opposition led to the bill being temporarily stalled during Short.
According to the new approach, the SEC intends to focus on tokenized securities, while the Commodity Futures Trading Commission (CFTC) will oversee digital assets and cryptocurrencies like commodities. Mr. Selig stated, 'We need to establish a clear classification and adhere to our enforcement responsibilities,' while Mr. Atkins added, 'Our goal is to ensure that no assets are left behind.'
This approach differs from the hardline stance taken during the Biden administration. Former SEC Chairman Gary Gensler primarily regulated the cryptocurrency sector through punitive measures. The new leaders also expressed the view that increased pressure following the collapse of FTX in 2022 has led some companies to leave the U.S.
Conversely, Atkins and Selig apply a more 'innovation-friendly' approach. Atkins argues that an 'innovation exemption' could be granted to this sector to allow new tokens and technologies to be brought to market faster. He remarked, 'People want clarity; uncertainty is the biggest enemy of innovation.'
*This is not investment advice.