The Securities and Exchange Commission (SEC) is planning to introduce some sweeping crypto rules that allegedly would allow regulators to check in on the activities of crypto exchanges and defi platforms.
The SEC Is Working to Regulate Crypto at All Costs
According to bitcoin and crypto bull Hester Pierce – who is often referred to as the “Crypto Mom” for her pro-bitcoin attitude – this could be very dangerous for the digital currency industry in that the rules are going to likely be implemented secretly. This new set of regulation is being introduced in a 654-page document that, surprisingly, doesn’t mention crypto once. However, the loopy verbiage allegedly applies to the space and will allow the SEC to check in on digital currency companies without having to say they’re doing so.
In an email, Pierce explained:
The proposal includes very expansive language, which, together with the chair’s apparent interest in regulating all things crypto, suggests that it could be used to regulate crypto platforms. The proposal could reach more types of trading mechanisms, including potentially defi protocols.
According to Gary Gensler – the man in charge of the SEC – the new rules are designed to close what’s known as a “regulatory gap” that’s being caused by trading platforms that are currently unmonitored by the SEC and similar agencies. Right now, it is being proposed in the document that any unmonitored exchanges would experience greater resiliency and “access in the Treasury market,” as unregulated securities would soon become the responsibility of the SEC.
By contrast, Pierce is convinced that this is just an excuse for the government to spy on crypto traders and related businesses. She states:
The expansive definition that’s being proposed for exchanges will cover a lot of potential platforms that haven’t thought necessarily that they would be covered and that’s in the traditional security space, as well as in the crypto space.
In an interview last year, Gary Gensler commented that defi platforms should not be exempt from market regulations. He stated:
Even though they are decentralized, with no central entity in charge, defi projects that reward participants with incentives or digital tokens could enter territory that is subject to SEC regulation.
Does Anyone in Politics Really Get BTC?
Government regulators under Biden appear to be hellbent on sticking their big noses into the crypto space. For example, last year’s infrastructure bill had little to do with infrastructure. Rather, it contained several provisions pertaining to separate industries including crypto. One such rule included within the document would require all individuals engaged in crypto transactions of more than $10K to report their activities to the Internal Revenue Service (IRS). Many saw the bill as a massive invasion of privacy.
It also doesn’t help when the administration is stuffed to the gills with regulators – like Janet Yellen – that clearly don’t understand bitcoin, yet somehow feel empowered enough to speak on it.