The SEC has proposed a new framework for crypto regulation amid significant losses faced by Bybit, totaling $1.5 billion. This proposal might bring about changes within the cryptocurrency sphere.
New SEC Crypto Framework
The SEC, led by Acting Chair Mark Uyeda, proposed a new regulatory framework on February 21, 2025, following Bybit's losses. The framework aims to clarify when crypto assets fall under securities laws and encourages public input amid market volatility and institutional shifts.
Crypto Market Response to SEC Proposal
The losses incurred by Bybit and the proposal for the new framework have affected global markets, causing volatility in the prices of BTC and altcoins. The crypto community remains cautious, reflecting the industry's fragile state. Financial analysts note potential shifts in institutional participation as the SEC aligns with less adversarial regulatory approaches.
Lessons from Terra and FTX Collapse
The events echo the collapses of Terra and FTX in 2022, which also drew increased regulatory scrutiny and market disruption. The current initiative could help prevent similar failures in the future. Experts predict that regulatory clarity may lead to increased institutional engagement and market stability.
The SEC's proposal for new regulations in light of Bybit's losses could mark a step towards a more stable and highly regulated cryptocurrency market, but its success will depend on public response and the implementation of proposed measures.
