Recently, Kristin Smith, CEO of the Blockchain Association, a renowned US-based nonprofit organization serving the cryptocurrency sector, made a bold remark about the regulation of cryptocurrencies.
The state of crypto regulation in the United States
Smith suggested that US lawmakers need to take control of crypto legislation to make the entire marketplace looked at “comprehensively” in an “open process.”
While the industry needs guidance, she argued that regulators “moving very quickly” could be a hindrance to progress on legislation and that there is a need for more industry involvement.
Smith expresses confidence that the United States Congress will soon implement stablecoin legislation, implying that preparations have been made since 2019.
As public ledgers make cryptocurrency considerably more visible than the old banking system, she thinks it’s more important to concentrate on stablecoin regulation and “market side” regulation than on legislation on crypto-related criminal activities.
On the other hand, having regulators spearhead legislative efforts with enforcement actions and settlements may not be the most effective strategy.
Smith hypothesized that this strategy might be because regulators are reacting to extremely particular facts and situations rather than taking a more holistic look at the industry.
The chief executive officer admitted that the dangers associated with cryptocurrencies are distinct from those associated with conventional financial services and that regulators need to devote more effort to analyzing market regulation in order to adjust it to those risks.
The Blockchain Association is a cryptocurrency lobbying organization with approximately one hundred members. It is supported by a variety of blockchain-related firms that operate for profit, such as Kraken, the Digital Currency Group (DCG), and the Filecoin Foundation.
The Securities and Exchange Commission (SEC) levied a fine of $30 million against Kraken just a few days ago for failing to register its staking service.
As was reported by Cryptopolitan, the SEC also filed a lawsuit against Paxos, the stablecoin provider that is responsible for the dollar-pegged Binance USD (BUSD), for violating investor protection laws, causing the company to stop minting BUSD indefinitely.
He is of the opinion that the current regulatory onslaught on the business has had the same effect as a crypto carpet bombing. With reference to the FTX collapse from last year, she said that authorities erred by focusing on enforcement rather than addressing the dangers posed by these networks and that they were unprepared for what turned out to be the greatest scam since Bernie Madoff.
Smith advocated for Europe’s regulatory approach, which she said provided comprehensive legislation that delegates to regulators the proper obligations to handle the dangers that are inherently present in these networks.
She also took aim at the remarks made by Elizabeth Warren, who had previously attacked the cryptocurrency sector for its inability to fully enforce money laundering standards, saying that the laws do apply to intermediaries like as Coinbase. She said that the laws do apply to Coinbase.
Smith admitted that there is a need for regulation when transferring from cryptocurrencies to currency or from cash to cryptocurrencies, but he emphasized that transactions between peers have to take place in a private manner.