The US legislator turns to SEC lawsuits when evaluating the cryptocurrency regulatory framework. According to Representative Maxine Waters, granting temporary registration to crypto firms under a proposed framework could mean rewarding ‘bad actors’ with a ‘get out of jail free’ card.
“Temporary registration could mean rewards for bad actors!”
Members of the United States House of Representatives Financial Services Committee met to discuss clarity for the digital asset ecosystem. Some of the attendees talked about the recent legal actions of the Securities and Exchange Commission (SEC) against crypto firms. At a June 13 session of the committee, senior member Maxine Waters said Democrats took a “serious and thoughtful look” at a proposed framework presented by Republicans on the regulation of digital assets. Committee chairman Patrick McHenry talked about the arrangements to be made after the congressional recess in July. He also noted that he is waiting for bipartisan approval on a draft bill.
Maxine Waters touched upon the disadvantages of progress without comprehensive analysis and cooperation between the two political parties. In that case, the legislation could leave the door open for potential fraud and misuse of client funds, she said. The California Representative cited the collapse of FTX and the criminal charges of former CEO Sam Bankman-Fried. She also referred to the SEC’s recent actions against Binance and Coinbase, she. In this context, Waters underlined the following points:
I am particularly concerned that the Republican bill would allow crypto firms currently being sued for violating our securities laws to continue doing business through provisional registration. The bill seems to stop any sanction action by the SEC against crypto firms, even if they are fraudulent. This temporary registration could reward bad actors with a ‘get out of jail free’ card and allow them to continue to harm consumers and investors.
Aaron Kaplan: In the end, it was the American people who suffered!
cryptocoin.comAs you follow, the SEC introduced a bill on June 2nd. This bill makes it mandatory for digital asset trading platforms to register as an alternative trading system. Accordingly, it will not allow platforms that do not accept this to work. However, it will allow registered firms to offer “digital commodity and payment stablecoins.” In addition, it will restructure the roles played by the SEC and the Commodity Futures Trading Commission (CFTC) in regulating digital assets in the United States. Prometheum founder and co-CEO Aaron Kaplan made the following statements at the hearing:
When it comes to breaches or alleged breaches in the case of FTX, and in the case of Binance and Coinbase, it’s been the American public who holds the bag. The best way forward is pretty clear. And that is the enforcement of federal securities laws (through the SEC).
Reactions to the regulation-sanctions approach for the cryptocurrency industry
Other lawmakers have reacted differently to the SEC’s apparent regulation-sanctions approach. Republican Ohio Representative Warren Davidson, who also sits on the House Financial Services Committee, proposed on June 12 that SEC Chairman Gary Gensler be removed from office through legislation that would restructure the commission’s powers. However, the legality of this move is unclear.
Amid SEC lawsuits, Binance.US backed out against the commission’s efforts to freeze its funds. In recent developments, a District of Columbia judge was considering how the SEC, Binance and Binance.US would handle assets. It was also considering competitor motions regarding other pending legal proceedings.
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