Yesterday, the subcommittee of digital assets of the financial services of the Chamber held an audience on the sidewalk on the road to digital assets. There is a consensus on the fact that Stablecoin’s legislation is urgent, with several bills circulating. However, there is also a need for legislation around market infrastructure, including the regulation of cryptography exchanges. Last year, the Chamber adopted the bill made 21, but there was less progress in the Senate. One of the subjects discussed during the hearing was whether the dry could provide a solution in the meantime.
A point to remember from the hearing is a light alternative to a complete bill on cryptography infrastructure such as F Fit 21. For the moment, legislation can only be necessary to make the CFTC the regulator of the markets of raw materials in cryptography. The steps can involve:
- Delegate the authority to regulate the crypto spot at the CFTC via the legislation
- Creation of a self-regulator organization (SRO) jointly supervised by the CFTC and the SEC which would establish rules for the exchanges of crypto and similar
- SEC clarifies the rules when a digital asset is a security or not
- SEC creates new exemptions for digital active issues
- And all the other elements on the list recently proposed by the Commissioner of the Sec Peirce.
Even if it is not the long -term solution, it could be the fastest interval.
Regulatory exemptions
The Hill Congress interviewed Coy Garrison about the different exemptions from the dry currently used to issue digital assets. Mr. Garrison previously been a lawyer at the SEC HESTER PIIRCE commissioner. The lawyer explained that many issuers use regulations, which restrict the assets to offshore investors. Those who are ready to target American investors often use regulation D, which means that assets are only available for rich investors.
“What I think that the ecosystem must understand is that all these necessary activities cannot be taken care of by the Commission without the Congress,” said the Hill Congress. And he asked what type of exemption system the dry could add without congress.
Mr. Garrison suggested something similar to the provisions of Safe Harbor of Commissioner Peirce, who would allow access to retail investors. Last week, Commissioner Peirce mentioned the examination of regulation A and crowdfunding rules. In addition, Mr. Garrison noted that disclosure requirements could be adapted, because token holders have different interests compared to shareholders who need financial statements, which he specified in his written testimony. He noted that many provisions from other exemptions could be used, including limits to the number of investors and the proportion of the net value of a person who can be invested.
Another witness, the former president of the CFTC, Timothy Massad, wants the SEC to take a first pass, rather than the congress. He stressed that the SEC only needs the three voices of its Republican commissioners, against 60 votes from the Senate.
“I trust that they (the dry) can offer interesting ideas, but it is a very difficult problem to solve. And I fear that if the Congress tries to do so, we will know our securities markets, “said Massad. He answered questions from the Haridopolos Congress member, who observed that the challenge by leaving all this to regulators is that the administrations change.
A cryptographic self-registration organization?
The Hill Congress, which previously presided over this sub-comity and now chairs the Committee of Financial Services of the Main Chamber, questioned Mr. Garrison about self-regulating organizations (SRO).
“You have pleaded for a SRO spouse to supervise digital assets as a practical way to get around these questions. Do you still plan that? “He asked.
Mr. Garrison asked for clarification as to whether the SRO would be supervised jointly by the SEC and the CFTC, which the Hill Congress confirmed.
“Yes, I think it could potentially work very well,” replied Mr. Garrison. “Any type of communication between the two agencies and coordination on regulations would make sense.”
Clarify how regulated entities can interact with digital assets
The member of the Stutzman Congress asked which subjects should be the highest priority for the SEC. Mr. Garrison replied that the clarification of the status of digital assets under the laws on securities and the difference in activities is not the scope of the laws on securities, because everything else results from it.
He continued: “Providing advice on how intermediaries regulated by the dry can affect digital assets. Now this would apply both in the context of digital assets which are not titles as well as digital assets which are titles like a tokenized action. Providing a clear route to brokers, investment advisers, compensation agencies, transfer agents to be able to engage will really allow the ecosystem to flourish. »»
It should be noted that this light legislation approach was only briefly discussed and that not everyone has accepted. One of the witnesses was Jonathan Jachym, assistant general councilor of Kraken Digital Asset Exchange, one of the largest in the United States.
“These things do not exclude each other,” he said. “I know there was a discussion on Let’s Wait, let’s move the Stablecoins first. Let us wait for the structure of the market. We cannot wait further. And the congress does not need to move a bill on the structure of the market which solves each problem of the ecosystem. We are talking about the most fundamental fundamental rules for regulating centralized exchanges. And these two agencies can continue to work in tandem while Congress advances the bill in this cycle. »»
