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Will Crypto Companies Be Able to Meet the Licensing Expectation?

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Will crypto companies be able to meet the licensing expectation? The financial stability supervisory board convened for a public meeting today, where several key regulators discussed the cryptocurrency industry.

Gary Gensler argues that crypto companies do not comply with the current rules, while Rohit Chopra says that the current authorization system for fintech companies, including crypto companies, is insufficient. Several top financial regulators in the United States raised issues with the cryptocurrency industry and called for stronger regulation at Friday’s meeting of the Financial Stability Oversight Council, a committee of US financial regulators.

“It is so important to bring intermediaries as well as issuers of cryptocurrency tokens into compliance,” Securities and Exchange Commission president Gary Gensler said, adding that he believes that many crypto companies are not support. not the legal ones. “There is nothing in the crypto market that is not in line with the securities laws, but the risk of this speculation, volatility, and what I believe is an unhealthy market – that is not in line with the law we are real – putting investors at risk.”

The SEC, including Gensler’s current chairman and former chairman Jay Clayton, has long maintained that many digital assets are securities and fall under securities laws.

Crypto exchanges operating in the United States currently do so through the registration of various state issuers. Another member of the FSOC, Rohit Chopra, the director of the Consumer Financial Protection Bureau, argued that the situation is not sufficient for crypto and other fintech companies, especially those who hold uninsured consumer funds.

“The failure of such a program could turn millions of American consumers into unsecured borrowers of bank loans, as experienced with FTX,” he said, refer to the failure of crypto exchanges. “Our state money transfer laws are not designed to provide long-term stability for these types of transactions.”

Treasury Secretary Janet Yellen referred to an October report from the FSOC, stating that “Crypto-wallet operations could pose a risk to the US financial system if their connection to the traditional financial system or the global scale would – formed without a member or associated with the appropriate. law.”

The regulators also want to examine how to regulate some digital asset changes that “may or should be made to comply with existing laws and regulations,” according to the 2022 annual report they approved today.

The report also calls for increased enforcement of current financial regulations as they apply to digital assets, defeating “regulatory litigation,” and for Congress to pass new legislation to give regulators more direct authority over spot market for bitcoin and other digital assets. Consider the name.

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