• The US Securities and Exchange Commission (SEC) is regulating the trillion-dollar crypto market by enforcement.
• SEC’s whole claim to govern the sector relies on deeming digital assets securities, not currencies or commodities.
• The House Committee on Agriculture meeting on June 7 published a draft bill regarding crypto assets as commodities, which might end SEC’s jurisdiction over the crypto market soon enough.
The US SEC Regulating Crypto Market
The US Securities and Exchange Commission (SEC) is currently regulating the trillion-dollar crypto market by enforcing laws and filing lawsuits against top exchanges such as Binance and Coinbase. SEC Chair Gary Gensler has commented that he has never seen so much “noncompliance and hype masquerading as real” in this field before. In Fiscal Year 2022, 760 enforcement actions were brought with payments totaling $6.439 billion, which was the highest in history.
Cryptos Are Securities
For the SEC to have legal authority over the crypto sector, they must consider altcoins securities, not currencies or commodities. A currency is a store of value, unit of account, and medium of exchange; whereas a security is a tradable financial asset with monetary value. Chairman Rostin Behnam stated that ‘regulation by enforcement’ is not an appropriate way to govern a market when commenting on their lawsuit against Coinbase.
Crypto Assets As Commodities
The House Committee on Agriculture meeting on June 7 proposed a draft bill regarding crypto assets being considered commodities rather than securities or currencies. This could mean that the SEC would no longer have jurisdiction over this aspect of finance if Congress passes this bill into law as expected.
Alternate Motive?
It could be argued that the SEC’s motive in considering cryptos “securities” may be more complex than it initially appears – namely, attempting to eliminate competition from other agencies such as CFTC for control over the sector as a whole.
Conclusion
The US Securities and Exchange Commission (SEC) has been regulating the trillion-dollar crypto market by enforcing laws through lawsuits against exchanges such as Binance and Coinbase; however their jurisdiction might come to an end soon enough if Congress passes a bill considering cryptocurrencies commodities instead of securities or currencies. It could also be speculated that part of their motive in doing so may be an attempt to eliminate competition from other agencies for control over this industry overall.
