BIDEN ADMINISTRATION WANT’S CRYPTO REGULATIONS ASAP
The uproar began shortly after Coinbase filed its latest quarterly application with the SEC and filed a lawsuit about the new need for disclosure to any public companies holding crypto assets of foreign companies, named SAB 121, CEO and founder of Coinbase explained to following tweet. day.
"Because legally held crypto assets may be regarded as assets, in the event of a fraud, the crypto assets we hold on behalf of our customers may be subject to liability and such customers may be treated as our unsecured ordinary creditors," Coinbase added.
In response, government officials point out that Congress has put regulatory frameworks in place for any future crypto laws that could keep customers' assets out of exchange rates. While this is the case for traditional financial companies, because there is no strict rule for keeping crypto exchanges, it is common for all assets to end up covered.
If a company goes bankrupt, there is a definite order in which to repay the loan first in the event of a balance, and ordinary creditors are not protected. In this case, as the study installs, in the event of a collapse, customers with trading tokens may end up losing access to them permanently or see them used to pay off other debts.
"Don't think you own token when you go into a digital wallet," SEC chairman Gary Gensler said this week at a conference. "When the stadium goes down, guess what, you have a relationship with each other and the stadium. Get in line for the court of disbandment."
Risk and Control
Although Coinbase has assured its customers and investors that it is not in danger of collapse, for now, it has highlighted the risk, sometimes unknowingly to participants. It also provides a good argument for the need for more regulatory definition within the space that could eliminate some of the uncertainty investors are currently experiencing, largely due to the UST and Luna crash that saw customers of stablecoin and affiliate tokens losing billions. .
President Biden issued an Executive Order in March acknowledging the power of crypto technology and the innovations it offers, as well as the risks it poses, especially to investors. The EO has requested a full review of crypto by all regulatory bodies related to different periods as administrators conduct a comprehensive industry audit. Crypto regulation within the U.S. it will be difficult and may be nuanced according to Bitwise.
"There has been a call for us to take a closer look at the differences (within the crypto) and how important that difference is in recognition because not all should be treated the same and not all should be treated the same," he said. Katherine Dowling, general adviser and COO of Bitwise, in response shortly after the EO announcement.