According to Bloomberg, the idea of banning cryptocurrencies in the U.S. is no longer relevant. At the same time, the industry requires adequate regulation, which calls for significant changes from the SEC.
SEC's Shift in Crypto Regulation Approach
Matt Levine, author of the 'Money Stuff' column, argues that despite the risks, the cryptocurrency industry has become too large and global to simply shut down. He states that ignoring cryptocurrencies is also not an option. The only realistic path forward is proper regulation.
Impact of Gensler's Policies on the Cryptocurrency Market
Levine believes that the SEC, under former chairman Gary Gensler, adopted a harsh approach to regulating cryptocurrencies by treating many tokens as securities. This created resentment in the industry and triggered price drops in response to SEC announcements. Research indicates that cryptocurrency prices fell by an average of 5.2% within three days of SEC announcements.
Future Directions and New Initiatives in Cryptocurrency Regulation
With the appointment of new SEC chair Paul Atkins, the situation may change. His initiative, 'Project Crypto,' aims to streamline the process for token issuers to register their assets in a way that aligns with the nature of cryptocurrencies. The U.S. is also striving to adapt its regulation to support digital technologies.
With new initiatives and changes in SEC approaches, the U.S. cryptocurrency industry is on the verge of a regulatory transformation, which could lead to improvement for all market participants.
