With crypto asset regulation, can the U.K. and U.S. keep pace with this emerging market?

At a virtual hearing of the House Financial Services Committee on Thursday, new Securities and Exchange Commission (SEC) Chairman Gary Gensler said the cryptocurrency market could benefit from broader investor protections

With crypto asset regulation, can the U.K. and U.S. keep pace with this emerging market?

At a House Financial Services Committee virtual hearing Thursday, new SEC Chairman Gary Gensler said the cryptocurrency market could benefit from broader investor protections, saying, “I think this near $2 trillion market could benefit from better investor protections.”

Bitcoin is a store of value that is not controlled by the government. As a result, as crypto capital markets boom, regulators and lawmakers in various countries are finding themselves having to make huge efforts to barely keep up with the crypto market’s progress. And both the U.S. and the U.K., the dominant traditional capital players, have been slow and sluggish to step into the new market.

Gensler specifically addressed the issue of regulation of cryptocurrency trading platforms, claiming that Congress should consider implementing more investor protections around them and that the SEC would provide greater transparency in crypto custody. He said, ” Cryptocurrency trading platforms currently have no regulatory framework… The framework would provide greater protection…There is currently no market regulator around cryptocurrency exchanges and no protection against fraud or market manipulation.”

In the United States, the regulation of cryptocurrencies is somewhat strange, at times held in high regard and at other times pursued, as its entire regulatory system is built on a federal and state level, divided and governed. In the UK, on the other hand, there is a more unified regulatory approach and charter for the crypto market.

Andrew Bailey, governor of the Bank of England, expressed his opposition to cryptocurrencies again during an online discussion held at the World Economic Forum in Davos earlier in the year, stressing that digital innovation in payments will always be there, but cryptocurrencies will not.

Favorable legal provisions are being passed in some U.S. states to attract investment, stimulate the economy or keep pace with modern technology, such as Wyoming (which is often seen as a pioneer in cryptocurrency regulation and has passed various related laws, including recognizing property rights and authorizing new types of licensed depository institutions); Colorado (where cryptocurrencies are exempted from the state’s securities laws); and Ohio (the first state to allow partial payment of taxes in cryptocurrencies); while

other states (particularly those with significant traditional financial industries, such as New York and California) have passed restrictive legislation regarding crypto assets and investments, perhaps foreshadowing their future direction.

New York, for example, has a comprehensive regulatory regime that requires companies to obtain ” BitLicenses” in order to operate virtual currency businesses and has published a “whitelist” of approved virtual currencies. As a result of these different approaches, cryptocurrency companies are thinking more carefully about where to register and conduct business.

The U.S. Securities and Exchange Commission (SEC), XRP’s Nightmare. The commission does not directly regulate cryptocurrencies, but has been advocating for legislation to confirm its jurisdiction over initial token offerings (ICOs), which are often considered securities by the SEC, and more broadly, cryptocurrency-related tradables such as bitcoin-related ETFs. The Commodity and Futures Trading Commission (CFTC), which has jurisdiction over futures, options and swaps related to cryptocurrencies and has the authority to prosecute fraud and manipulation in the cryptocurrency spot market. Various government agencies, stacked on top of each other, have overlapping regulatory jurisdictions, and you are fighting over them.

In the UK, by contrast, its regulatory system is much more cohesive. Despite the UK’s increasingly federalized domestic governance structure (Northern Ireland, Scotland and Wales all have “devolved” parliaments with different jurisdictions), there is a unified approach to cryptocurrency regulation across the UK. Moreover, as the UK has left the EU and the “transition period” during which EU law still applied to the UK is now over, there is further scope for the UK to carve out a unique model of cryptocurrency regulation that is not closely linked to the EU approach.

Regulation and legislation relating to cryptocurrencies is constantly evolving in an attempt to keep pace with cross-generational technological innovations. While cryptocurrencies are typically global in nature, regulation is primarily at the national or sub-national level. We see a clear divergence of approaches at the national (and even sub-national) level, and as such, companies and users of cryptocurrencies must be constantly vigilant to hedge against legal risks that may come at any time.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/with-crypto-asset-regulation-can-the-u-k-and-u-s-keep-pace-with-this-emerging-market/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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