In his latest column, Matt Levine, a prominent Bloomberg commentator, analyzes the regulatory landscape of cryptocurrencies in the U.S. and concludes that a ban on them is now impractical.
Cryptocurrencies Become Too Influential
According to Levine, cryptocurrencies have reached a level of influence that makes them impossible to simply outlaw. Despite the existence of 'lots of dumb stuff' in the sector, ignoring the industry is also not a feasible option for the U.S. Securities and Exchange Commission (SEC).
Regulatory Challenges in the Crypto Industry
Levine criticizes former SEC Chair Gary Gensler for his hostile stance on cryptocurrencies, which views most tokens as securities. This perspective essentially makes cryptocurrency registration almost impossible, rendering them effectively illegal in the U.S. Levine finds this view annoying as it overlooks the existence of experimental and non-corporate projects.
Prospects of SEC Regulation
Levine argues that the SEC is the best agency for regulating cryptocurrencies since many tokens behave like securities. However, existing protections for securities should be tailored to reflect the distinct nature of digital assets. SEC Chair Paul Atkins has hinted that the SEC may make it possible to register various cryptocurrencies, which Levine believes is the correct approach. Additionally, Atkins recently announced the 'Project Crypto' initiative to streamline the regulation of digital assets.
In conclusion, Levine emphasizes that ignoring the development of the crypto industry is not an option, and the SEC must adopt a sensible approach to regulation that considers the unique characteristics of digital assets.
