Crypto Regulation in the US: Can America Keep Up with the Pace of Crypto?

It’s been a roller coaster of a week for crypto news. Binance faces a lawsuit from the CFTC, Sam Bankman-Fried bribing charges, and the CFTC Chair reiterating their belief that Ether is a commodity. Ethereum (ETH) has climbed 4.3%, but Bitcoin is relatively flat. With crypto regulation ramping up and crypto exchanges in the United States feeling the pressure, questions arise if America can keep up with the pace of crypto. It’s a bullish week for Asia, with China’s state-owned banks actively soliciting crypto business in Hong Kong.

Ruling Sheds Light on Hinman’s Crypto Speech

Amidst these events, a small but significant win for the crypto community occurred this week. A federal judge ruled that the United States Securities and Exchange Commission (SEC) cannot seal documents related to former official William Hinman‘s 2018 speech on crypto and securities in its lawsuit against Ripple.

Hinman’s now-notorious speech was made at the Yahoo Markets Summit of 2018. He proclaimed that Ether is not considered a security, leaving a few open questions for the crypto world. Firstly, what was his rationale behind this announcement? Secondly, which stakeholders contributed to this pivotal speech?

These questions got a bit closer to being answered this week when CoinDesk received a Freedom of Information Act request in November. Moreover, Judge Analisa Torres for the U.S. District Court ruled that the documents are “judicial documents”. We still don’t have access to the full documents but what we got to see is an extensive email thread that revealed that multiple high-ranking SEC officials. This is including then-Chair Jay Clayton, provided input to the Hinman speech.

Securities Law Implications: Sealed Emails Rejected by Court

The potential implications of these public emails would be to undermine the SEC’s claim that the speech was Hinman’s personal opinion and not official guidance. Defending its motion, the SEC argued that sealing the documents was necessary to preserve “openness and candor” within the organization. However, the court has rejected this argument, making it clear that they should be opened regardless of their impact in the decision.

The ruling is momentous for the crypto community since the Hinman speech transforms the landscape of how the SEC might approach the status of cryptocurrencies from a securities law standpoint. It potentially opens up a world of possibilities for crypto entities of all kinds, from exchanges and token issuers, to investors, to traders.

Crypto Climate in US Shifting: Lessons from Judge Torres’ Ruling

Now, all eyes are are on the U.S. debt ceiling talks. Bitcoin and Ether stand unwavering, shrugging off the potential turbulence from these U.S. debt ceiling negotiations. However, crypto-based companies Tether and Circle have been diversifying into the crypto space to mitigate the risks associated with a government debt default.

The biggest takeaway from these events is that the crypto climate in the United States could be shifting, from a focus on punishing cryptocurrency entities to regulatory leniency. No matter what happens in the future, the crypto industry will benefit from learning about how Hinman reached his decision with the help of a federal judge. It goes to show that with the right amount of vigilance and determination, the crypto community can rest assured that even the most obstinate opponents of deregulation and innovation can be held to an open and fair standard. As Judge Torres stated in her verdict, “the public’s right to access judicial documents trumps the SEC’s public interest arguments in favor of confidentiality.”

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Chris Griffin
Chris has had a career as an advisor to the tech industry, incubating start-ups in the tech industry. Welcoming Chris to contribute his expertise covering the latest things he sees in blockchain