There is never a good time for a crypto winter, but it would be difficult to find a worse one than this.
It’s easy to dismiss Crypto’s PR difficulties as nothing more than an image problem. Not everything is as it seems. This requires diamond hands, not pointless hand wringing. Leave the skeptics behind. In any case, we would never win over the most ardent opponents and unrepentant skeptics. (The problem with this approach is that it inevitably tends to promote preaching to the choir as a viable technique, however comforting his blithe optimism may be. It’s not. It never was.)
Even before the value of Bitcoin (BTC) reportedly disappeared in a single day, things were not looking good in the eyes of the general public. There was a negative feeling everywhere; A Twitter account that documented how crypto dudes were mistreated garnered thousands of followers. The world’s largest cryptocurrency exchanges are laying off hundreds of full-time employees, and the self-proclaimed “cryptoqueen” has made the FBI’s top ten most wanted fugitives list for defrauding clients out of $4 billion. Uff. The defense is over.
Since the beginning of cryptocurrency, a faceless horde of passionate critics and unconvinced doubters have served as useful straw men. But after the disaster, it became clear that the skeptics who wanted to subdue us were real people with real authority and were watching us.
This law is not symbolic. For one, she has bipartisan support in a government where such support for anything has become almost unheard of in recent years. If (and likely if) the law passes, the Commodity Futures Trading Commission, which Gillibrand helps oversee, would regulate the cryptocurrency directly, in the process rebranding digital assets as commodities like wheat or oil.
There are examples of this on both sides of the Atlantic. Washingtonians are becoming increasingly skeptical about cryptocurrencies. Gary Gensler, the chairman of the Securities and Exchange Commission, likened stablecoins to “poker chips” last September and stressed the need for Congress to give it more regulatory power over cryptocurrencies. A sweeping regulatory plan known as the Responsible Financial Innovation Act, co-sponsored by Senators Kirsten Gillibrand (D) and Cynthia Lummis (R), was introduced on June 7 and was days, not months, away from the market-shattering decline. In August, a new compromise proposal was tabled by Senators Debbie Stabenow (D) and John Boozman (R).
The 69-page law is so long that it might have to be split up and passed in pieces. It is important to note that Lummis is not against crypto. She has actively asked key figures in the cryptocurrency business to work with her on legislation, which is better for the industry as a whole than just trying to enforce and expand SEC regulations.
It should extend this offer to industry. The CFTC would have exclusive control over digital assets under the Lummis-Gillibrand plan, except in cases where the digital assets fall within the scope of securities regulation, which is quite simply preferable to the more restrictive Stabenow-Boozman Act. It’s important to note that the CFTC has fared far better than the SEC so far. The SEC has failed miserably in its efforts to provide regulatory direction, instead attempting to guide the industry through enforcement that sometimes borders on mere punishment.
We should get in touch as soon as possible. Sensible regulation doesn’t harm the cryptocurrency industry, but hasty regulation might. The aftermath of this crash could put time pressure on policymakers who are prioritizing regulations, forcing them to overreact with drastic measures. From a regulatory perspective, the harshness of this crypto winter and the market’s utter inability to offer any protection to investors is evidence that we cannot be left to our own devices. An active, transparent cooperation would avoid this.
Summary of the news:
- For the cryptocurrency sector, Lummis-Gillibrand is a boon
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