SEC Chair, Gary Gensler is set to change this by making increased calls for regulation and although some quarters may not be pleased with his stance, it may prove beneficial for the space in the end.
In February, Gary Gensler was nominated to head of the SEC and on April 17, 2021, he assumed office as the new SEC boss. His appointment was highly anticipated given his experience with cryptocurrencies as he previously taught a blockchain course at MIT.
Upon assuming his new role, he immediately began calling for increased regulation of cryptocurrencies. His recent call was for Congress to expand the powers of the SEC to allow it to efficiently regulate cryptocurrency trading, lending, and other ancillary activities.
He made the call during the Aspen Security Forum and referred to the current terrain as being “more like the wild west.” Gensler’s call for increased regulation is not borne out of spite but to protect investors. He said, “Right now, we just don’t have enough investor protection in crypto.”
Is This Any Good For the Cryptoverse?
Cryptocurrencies have always had an uncanny relationship with regulations, often viewing them with a lot of skepticism. This is because of the historical antecedents of regulations stifling the growth of cryptocurrencies.
It is easy to categorize Gary Gensler’s call for increased regulation as being inimical to the advancements of cryptocurrencies. However, another angle reveals that Gensler’s intentions are pure.
Big money from institutional investors or state-level investors is only possible within a healthy regulatory framework that is geared at protecting their interests. With regulatory levers in place, institutions will be willing to inject large funds into the markets. This will have the effect of increasing the market capitalization of cryptocurrencies leading to a win-win situation for all parties.
Infrastructure Bill Causes Concerns
The proposed Infrastructure Investment and Jobs Act has left a bad taste for cryptocurrency enthusiasts given the tax requirement burden that it places on cryptocurrency startups.
The Bill’s definition of the term ‘broker’ is wide enough that it can be construed as encapsulating miners, software developers, and other technicians in cryptocurrencies.
The nature of the bill has elicited an outcry from cryptocurrency-affiliated entities as they may be subject to the tax provisions. The proposed legislation would potentially lead to crypto firms being required to increase surveillance on their users which runs contrary to their scope and principles.