On April 11, the Crypto Working Group of Securities and Exchange Commission of the United States (SEC) organized its second round table in a series discussing the regulation of digital assets, with the fact that this event is how to regulate the trade in digital assets.
During the round table, entitled “Between a block and a difficult place: sewing regulation for crypto trading”, the president of the acting dry Mark Uyeda suggested that the regulator could consider a framework for monitoring digital assets “limited in time” to allow companies to continue to innovate while the agency is doing a permanent solution.
“We must determine whether there can be a more effective regulatory method,” said Uyeda. “While the Commission strives to develop a long-term solution to solve these problems, an exemption framework exempt conditional limited in time for registrants and non-inscriptions could allow greater innovation with blockchain technology in the United States in the short term.”
In addition to posting this short -term solution, the acting president opened the round table by highlighting the ineffectiveness of the current state license framework for digital asset platforms, which suggests that a more coherent federal approach could better protect innovation and consumers.
UYEDA – which remains in charge at the SEC at the moment, with the appointment of the entrant president Paul Atkins confirmed by the Senate on April 9 – explained that the current federal laws in terms of securities have questions to integrate the titles of tokenized in traditional exchanges, such as the restrictions on the inscription of unregistered titles.
He also wanted to emphasize that blockchain has the potential to transform the securities market processes by rationalizing operations, improving liquidity and allowing continuous exchange.
“I encourage market players who develop new ways of negotiating titles using blockchain technology to provide comments on where exempt assistance can be appropriate,” said Uyeda.
The acting chief was flanked by his colleague Republican Commissioner Hester Peirce, who is the leader of the crypto working group and is known as “Crypto Maman”, thanks to his favorable opinions on the industry.
Pierce was appointed head of the working group when launched by Uyeda in January, with the aim of helping the commission “Draw clear regulatory lines, to provide realistic paths to registration, to create sensitive disclosure frameworks and to deploy the relevance resources of the law judiciously”.
The series of round tables was announced in March under the title “Spring Sprint to the Crypto Clarity”, with the first session which takes place on March 21, entitled “How we arrived here and how we go out – defining the security status”.
Friday, Pierce launched the number two session by asking the participants: “What can we and should do in the short term, and that should consider the longer-term congress to guarantee that regulatory gaps are filled while businesses are increasingly seeking to combine unsecured securities and business activities?”
Industry discussion
Panel participants included participants in the UNISWAP, FALCONX, Coinbase (NASDAQ: Coin) and groups focused on investors’ laboratory industry, as well as leaders of the New York Stock Exchange and President of Finance and Accounting in UC Berkeley.
A subject to discussion was which aspects of the digital asset industry should be the responsibility of the SEC.
Katherine Minarik, legal director of Laboratories of UNISWAP, suggested that peer transactions should not be in the jurisdiction of the dry because intermediaries present certain risks that decentralized platforms do not do so.
“Many of these risks disappear considerably or entirely when, for example, a participant in a transaction retains custody or control of their own assets,” said Minarik.
Hearing themselves with the subject of the jurisdiction, the co-founder of Urvin Finance and we, the investors, Dave Lauer, underlined the damage caused by the “Gazon War” perceived between the SEC and the regulatory group of the financial sector, the Commodity Futures Futures Trading Commission (CFTC), on which the agency regulates the parties of the digital asset.
“I noticed that the Gazon War, the intestine struggles, the constant question of who should regulate what directly caused investor damage,” said Lauer, who also sits on the advisory committee on the market structure of the Ontario securities committee and was previously seated in the regulatory committee of the regulatory authority of the financial industry.
To resolve this conflict, Richard Johnson, CEO and Capital Texture Founder, argued for a merger of the CFTC and the SEC when developing new rules for financial negotiation assets. He criticized financial innovation and technology for the law of the 21st century (Fit21), adopted by the Chamber last May, to create a regulatory fracture, asserting rather that the jurisdiction of the SEC is limited and cannot extend throughout the digital industry.
Johnson also stressed that no market can be fully centralized or decentralized, and although the SEC can establish rules in the United States, these regulations may have a limited influence on a global scale. He concluded that the digital asset market will continue to evolve and exchange with or without monitoring of the dry.
Apart from a few tokens of some panelists of the inherent risks involved in the space of digital assets, massively – like the first round table of the crypto working group – the discussion had a distinctly pro -scriptto tenor, with a notable exception.
Single voice of dissent
The love of the crypto that characterized a large part of the round table indicates the approach of the dry under the stewardship of the acting president Uyeda since the inauguration of President Trump and the departure of former president Gary Gensler in January.
Once again, he was left to the remaining democratic commissioner, Caroline Crenshaw, to be the only voice of moderation and prudence.
Crenshaw highlighted the risks that digital asset trading platforms apply to retail investors, in particular linked to the lack of police custody and registration practices.
“Cryptographic trading platforms are unique because, among other reasons, they often perform several services under one roof, including sometimes brokerage, compensation and guard,” she said.
In traditional finance, these functions are “generally carried out by separate recorded entities”, added Crenshaw, as they include a “high risk of conflicts of interest and risks for investors”.
She pointed out that “in some cases, we have seen these risks materialize in a way that caused significant disturbances and damage to investors.”
Crenshaw has also raised concerns about investors misunderstood the guarantees in place, arguing that certain recent market disturbances and failures of the market, such as FTX, have forced industry observers to become “painfully aware of the inadequacy between investor expectations and reality”.
She challenged the panelists and legislators present to examine critical issues concerning registration, execution standards and the risks of custody in the context of the construction of a new regulatory framework.
The next round table of the crypto working group will take place on April 25, with the title “Know Your Gustodian: Key considerations for cryptography guard”.
Watch: Blockchain Regulation with Marcin Zarakowski
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