Senator Elizabeth Warren and Intercontinental Exchange Inc. (ICE) CEO Jeffrey Sprecher both believe that the majority of cryptocurrencies will most likely be subject to securities regulation in the US.
The recent collapse of FTX, which destroyed countless billions from the market, left consumer funds in limbo, and damaged cryptocurrency’s reputation among regulators and officials, has caused a renewed focus on regulating cryptocurrencies as securities.
Sprecher, whose ICE runs the New York Stock Exchange, asserted confidently on Dec. 6 at the financial services conference by Goldman Sachs Group Inc. that cryptocurrency assets “are going to be regulated and dealt with like securities.”
He contended that as a result, centralized exchanges and brokers will eventually be subject to much stricter regulatory oversight and consumer protections:
“What does that mean? It means more transparency, it means segregated client funds, the role of the broker as a broker-dealer will be overseeing, and the exchanges will be separated from the brokers. The settlement and clearing will be separated from the exchanges.”
Sprecher asserted that the legal frameworks for securities already exist and will “just be implemented more strongly,” so new regulation is not necessarily necessary for cryptocurrencies.
Senator Warren wishes to use the whip
Senator Elizabeth Warren, a crypto sceptic, is reportedly working on a crypto bill that would give the Securities and Exchange Commission (SEC), led by Gary Gensler, the majority of regulatory authority over the crypto space.
According to a Dec. 7 report from online news outlet Semafor, which cited two unnamed sources close to the matter, Warren’s crypto bill is still in its early stages but aims to cover a variety of issues including taxation, regulation, national security, and climate.
Warren is said to be interested in imposing regulatory obligations, such as audited financial statements and bank-like capital requirements.
While specifics on the bill have not been revealed, Alex Sarabia, a spokesperson for Warren, confirmed with Semafor that the senator is looking to the SEC.
The author of the proposed cryptocurrency legislation, according to Sarabia, “believes that the SEC and other financial regulators have broad existing authority to take action against crypto fraud and illegal money laundering.”
Regulators have been debating for a while on which cryptocurrencies should be classified as securities or commodities; due to their true decentralized nature, Bitcoin is the only cryptocurrency that has received unanimity in this regard.
Ether has also occasionally been discussed as a commodity, but with much more opposition. Notably, Rostin Behnam, the head of the Commodity Futures Trading Commission (CFTC), recently changed his mind about Ethereum (ETH) being a commodity while addressing an invite-only crypto event at Princeton University. He now thinks that Bitcoin has that standing.
Michael Saylor, the founder of MicroStrategy and a Bitcoin maximalist, has taken things a step further in the world of cryptocurrencies by essentially calling for the shutdown of every cryptocurrency asset that isn’t BTC because he claims they are “committing securities fraud.”
Saylor reiterated his belief that assets like Ripple, ETH, and Solana are all unregistered securities because they were created and controlled by centralized organizations during an appearance on the PDB Podcast on December 6.
The ardent BTC maxi painted a picture of a situation he would like to see, saying “the best thing for the world would be for the SEC to shut down all of it.”
Naturally, he has received mockery on Twitter for his remarks: