The U.S. government is rapidly expanding its influence over the crypto industry as we know it. Of course, there’s plenty of legislation on the way. But even outside of Capitol Hill, there are bodies investigating the industry, chasing criminals within it and holding other bodies accountable for their roles. This week in particular is heavy with U.S. crypto news.
U.S. Securities & Exchange Commission (SEC) chair Gary Gensler is comfortable taking on a “heel” role to the crypto world. Gensler concerns himself with the average investor — those who are at real risk if their investments fail in any way. Last week, the SEC chair spoke on crypto legislation; Gensler says investor protection is of the utmost importance. The SEC, then, is working on ensuring compliance across exchanges, lenders and broker-dealers.
Now this week, Gensler is speaking again about compliance — or rather a lack thereof. As the SEC crafts its regulatory infrastructure for crypto, he notes “a lot of noncompliance” across the industry at large. Gensler points to a string of failed crypto hedge funds and other companies as examples, saying these firms would fall under “classic parts of the securities laws” in the traditional market.
The U.S. Office of Government Ethics (OGE) is working on crypto policy, too. Today, one new piece comes in the form of a non-fungible token (NFT) advisory. The OGE is asking officials to report all of their NFTs worth $1,000 in value. It also asks these officials to disclose whether they purchased the NFTs with cryptocurrency or stablecoins.
The Department of Justice (DOJ) is also staying busy in the crypto space. Yesterday, the DOJ announced that it has seized $500,000 in ransom payments and stolen crypto linked to North Korea-backed hacker group Lazarus. So far this year, the group is responsible for hacks worth more than $700 million.
Crypto News: Policy Talk on Capitol Hill
Congressional lawmakers also have plenty of crypto news to talk about this week. As regulatory policy starts to heat up again after a spring lull, there’s all sorts of storylines. Some are going after the SEC, others are telling it to do more. And while one of the biggest crypto bills of the year could face a delay, hope is not all gone about it seeing a vote this year.
Unsurprisingly, the two House Representatives making polar-opposite claims about the SEC are from separate sides of the aisle. For one, Republican Congressman Tom Emmer has a gripe with the SEC’s politicization of crypto policy. Emmer also clobbered the commission over its “industry sweeps,” challenging the body’s jurisdiction over the market. Emmer closed his statements by saying these sweeps “discourage good faith cooperation” between company and regulator.
Democrat Brad Sherman, on the other hand, says the SEC isn’t doing enough. Sherman is criticizing the SEC for its lack of cases against larger crypto companies like Kraken and Binance (BNB-USD). He says the commission is spending too much time pursuing “small fish.” Specifically, Sherman referenced the SEC’s pursuit of Ripple (XRP-USD), saying the “big fish operating the major exchanges did many, many tens of thousands of transactions with XRP.”
When it comes to Congressional bipartisanship, it’s a mixed bag of feelings. Senators Cynthia Lummis and Kirsten Gillibrand both say their bipartisan crypto infrastructure bill will likely be deferred to 2023, preventing them from getting the ball rolling on serious policy talks. However, noting recent bipartisan collaboration by the Congressional Agriculture Committee — which will vote on the bill next — there is hope for the bill this year.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
