The cryptocurrency market has gained tremendous growth and adoption momentum in recent years. As the value and uses of cryptocurrencies such as Bitcoin and Ether increase, regulators are confused about how to handle this new asset class.
Disagreement with CFTC and SEC
The disagreement between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) is one of the biggest hurdles in cryptocurrency regulation. Although CFTC Chairman Rostin Behnam sees Bitcoin and Ether as commodities, SEC Chairman Gary Gensler implies that Ether may be a security, causing uncertainty in the markets.
SEC-registered Prometheum’s decision to offer Ether custody further deepens this uncertainty. Behnam says this decision is not in line with the SEC’s view of Ether and may run afoul of CFTC rules. This creates a contradictory situation in US financial markets.
Regulatory work gaining momentum
CFTC Chairman Behnam emphasizes that regulatory work on cryptocurrencies should be accelerated. It notes that in fiscal year 2023, more than 49% of the CFTC’s enforcement actions were related to cryptocurrencies, and these cases consumed a lot of resources. Behnam says this puts investors and markets at risk.
The US Congress is trying to approve a bill called the Financial Innovation and Technology Act for the 21st Century. The bill aims to comprehensively regulate the cryptocurrency market. However, some articles in the bill and the dynamic structure of cryptocurrencies complicate the work of the law.
Possible solutions in Bitcoin and altcoin regulation
The following solutions are proposed to create a regulatory framework for the cryptocurrency market:
- Increasing coordination between the CFTC and SEC: The two institutions need to develop a common perspective on cryptocurrencies and make compatible regulations.
- Clarifying the legal status of cryptocurrencies: It should be clearly determined whether cryptocurrencies such as Bitcoin and Ether are commodities or securities.
- Establishing clear rules and guidelines for market participants: Clear rules and guidelines should be prepared for cryptocurrency exchanges, custodians and investors.
- Following technological developments: Regulators need to follow technological developments in the cryptocurrency market and adapt the necessary regulations accordingly.
Well, cryptokoin.com As we reported, the cryptocurrency market needs a regulatory framework in the USA. This framework should focus on protecting investors, ensuring the stability of markets and encouraging innovation. Regulators should step up work in this area by ensuring coordination between different agencies and communicating openly with market participants.
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