- SEC’s shift signals hope for more flexible crypto regulations ahead.
- Levine argues banning crypto is now impractical for the SEC.
- Atkins’ ‘Project Crypto’ promises clearer, more efficient digital asset regulation.
According to Matt Levine, a well-known Bloomberg columnist, the U.S. Securities and Exchange Commission (SEC) can no longer consider outright banning cryptocurrency. Levine asserts that crypto has grown too influential and widespread to be effectively outlawed.
Although he admits that the crypto industry is full of suspect players, he believes that outlawing it would be impractical and counterproductive.
Former SEC Chairman Gary Gensler is well-known for believing that most digital tokens should be regarded as securities and registered similarly to stocks. Such a regulatory approach would have rendered the majority of cryptocurrencies practically illegal, as registration of these assets is almost impossible.
Levine views this as an issue, especially since it does not acknowledge the variability of crypto projects, many of which do not conform to the standard corporate template.
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A More Flexible Approach: SEC Shifts Toward Practical Regulation
Levine suggests that the SEC is the best agency to oversee crypto regulation, as many tokens do share features with securities. However, he stresses that the regulatory framework for securities must be modified to better suit the unique nature of digital assets.
With this in mind, Levine points to the recent “Project Crypto” initiative spearheaded by SEC Chair Paul Atkins. This initiative aims to make cryptocurrency regulation more effective and transparent, which gives hope to the industry’s future.
Unlike his predecessor, Atkins has explained that most crypto tokens are not securities. Levine interprets this change of views as a move in the right direction, indicating a more flexible and pragmatic way of regulating crypto.
Shifting towards Gensler’s less restrictive approach, the SEC is preconditioning an environment where rules can be more explicit and possibly enable the industry to prosper without jeopardizing investors and exposing them to risks.
As crypto’s role gains momentum, it is apparent that regulators such as the SEC should balance innovation and investor protection. According to Levine, securities regulations may be adapted to apply to digital assets, which may bring the regulatory clarity that the industry requires to keep progressing and developing.
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