Benzinga - In the dynamic world of digital assets, regulatory bodies are in a continuous race to keep up.
With the recent decision by the National Futures Association (NFA) to approve Coinbase Global Inc (NASDAQ: COIN) as a Futures Commission Merchant (FCM), all eyes are now on the Securities and Exchange Commission (SEC).
Will the SEC align with the NFA's progressive stance, or will it carve its own path?
Richard Mico, the U.S. CEO, and chief legal officer of Banxa, a payment-and-compliance infrastructure provider, weighed in on the matter. "I’m cautiously optimistic about the state of regulation in the United States," he said. "The SEC has taken an approach widely seen as regulating by enforcement, generating concerns about a potential exodus of digital asset innovators to markets with clearer regulatory frameworks."
Mico highlighted the significance of major financial institutions like BlackRock (NYSE: BLK) and Fidelity applying for spot BTC ETFs, viewing it as a validation of Bitcoin and the broader industry.
Anthony Georgiades, a general partner at Innovating Capital, shared his perspective on the tumultuous regulatory landscape.
"This year has been a rollercoaster when it comes to crypto regulation in the U.S.," he stated.
Reflecting on the challenges faced by the industry, Georgiades mentioned the denial of banking services and the SEC's lawsuits against key players like Coinbase and Binance (CRYPTO: BNB).
However, he also pointed to the Ripple (CRYPTO: XRP) ruling as a beacon of hope, emphasizing its implication that crypto assets are not fundamentally securities.
"The CFTC seems to agree with the digital asset industry in thinking that crypto assets are not inherently securities," he noted, referencing the CFTC's decision to allow Coinbase to engage in futures trading.
Terrence Yang, Managing Director at Swan Bitcoin, offered a more critical viewpoint. "Regulation and compliance continue to trend towards more aggressive enforcement," he observed.
Yang expressed skepticism about the SEC following the NFA's lead, explaining that the NFA's role as a self-regulatory organization (SRO) under the CFTC is distinct from the SEC's focus on securities law violations.
"Both Coinbase and Binance aided and abetted the pump and dump of 'digital penny stock' cryptocurrencies on US retail."
Yang also highlighted the SEC's reluctance to follow other countries with Bitcoin ETFs, such as Canada, Brazil, and Dubai.
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Will The SEC Follow Suit?
The million-dollar question now is whether the SEC will take inspiration from the NFA's recent move. There are a few factors to consider:
While the NFA's decision to approve COIN as an FCM is undoubtedly a progressive step, it remains to be seen if the SEC will follow suit.
The evolving nature of the digital assets market, combined with global regulatory trends and the SEC's mandate to protect investors, will play crucial roles in shaping the future of digital asset regulations in the U.S.
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