The recent controversy surrounding the Securities and Exchange Commission’s (SEC) staff accounting bulletin has reignited debates about the legalities of the crypto industry and its involvement with the U.S. financial system. Two Republican lawmakers Patrick McHenry (R-N.C.), the Chairman of the House Financial Services Committee, and Sen. Cynthia Lummis (R-Wyo.) have strongly voiced their opinion regarding this controversial SEC directive.
McHenry and Lummis sent a letter to the Federal Reserve and other U.S. banking agencies to question how they’re responding to the SEC’s directive. They point out that the SEC’s decision could deny access to “safe and secure custodial arrangements” for digital assets.
In addition, they highlighted the legal risk faced by customers due to the directive, referring to the case of Celsius bankruptcy which classified customer’s assets as unsecured creditors.
The letter led to Fed Chair Jerome Powell responding on the matter, saying that the central bank was evaluating the SEC’s directive.
However, apart from the Republican lawmakers vocalizing their views, other legislative efforts coming from state senators and agencies related to crypto have been receiving attention.
State Senator Wendy Rogers, 68, introduced two bold bills in the Arizona legislature, one of which focuses on making Bitcoin (BTC) legal tender in the U.S. state. The bill has been proposed before by Senator Rogers, yet was defeated in 2022.
Rogers is also working with Senators Sonny Borrelli and Justine Wadsack on a bill that seeks to make crypto a tax-exempt property.
In New York State, another important bill was introduced to the Assembly, allowing state agencies to accept cryptocurrency as a form payment for fines and other civil charges.
On the other hand, the situation is not as progressive in Panama. President Laurentino Cortizo sent the crypto legislation passed last year to the high court for review, claiming that it violated the constitution’s core principle.
The South Korean government is also taking steps by announcing plans to introduce a crypto-tracking system to counter money laundering initiatives and recover funds linked to criminal activities.
In the U.S., legislators are reevaluating the crypto industry in light of FTX collapse, with Rep. Jake Auchincloss noting that it’s time for the blockchain investors and entrepreneurs to build things that matter or risk losing credibility.
Senator Roger Marshall also has a voice in the crypto regulation debate, but is more cautions and is pushing for tighter regulations.
On the other hand, Rep. Patrick McHenry argues that it’s necessary to “separate out the bad actions of an individual from the good created by an industry and an innovation.”
Lastly, in the most recent update, Sam Bankman-Fried’s’ (FTX former CEO) lobby to advance the Commodity Futures Trading Commission (CFTC) authority to regulate cryptocurrencies is unlikely to go through due to the recent events.
All these events and attempts to regulate crypto show that the crypto industry and its legalities is an ongoing debate due to the complexity of the matter. There are different opinions and views on this topic, leaving much controversy to discuss and figure out for the coming years.
One thing is for sure, the crypto industry needs clearer regulation in order to step up its game and be accepted in the real-world financial system.
