Coinbase, a publicly listed cryptocurrency exchange, is reportedly going to be sued by the United States Securities and Exchange Commission (SEC) for allegedly selling unregistered securities to the general public.
These rumours indicate that the SEC is making its strongest push to date to rein in the cryptocurrency industry, which falls under its purview.
Since the SEC has long been criticised for its enforcement-based approach to regulation, it would appear that the agency is attempting to establish a precedent by having a court declare cryptocurrencies to be securities.
A new lawsuit would “piggyback” on the first prosecution of alleged insider trading in the cryptocurrency industry by the Department of Justice, whose case requires the digital assets in question to be recognised as securities. This would allow the new lawsuit to proceed more quickly.
Gurbir Grewal, who is in charge of enforcement for the SEC, stated that the organisation is “not concerned with labels, but rather the economic realities of an offering” while speaking about the civil complaint that was initiated in conjunction with the criminal accusations.
In this particular case, those realities confirm that a number of the crypto assets that were up for grabs were in fact securities, and, as the allegations suggest, the defendants participated in behaviour reminiscent of insider trading…
Rest assured that we will continue to ensure that investors are competing on a level playing field, regardless of the label that is placed on the securities that are involved.
Because making a payment with security creates the possibility of a capital gain, the response of the SEC is extremely important to the payments business.
Meaning that even purchasing a Coke would need reporting to the IRS and the payment of taxes of up to 20 per cent, it is very difficult to use cryptocurrencies as a means of payment for tiny amounts of money because of this.
Exempting payments below a particular level — $200 or $50 are the main candidates — is one of the potential solutions that is currently being considered in Congress.
In either scenario, the maximum amount of an exempted transaction’s value is so minimal that it is highly likely to impede cryptocurrency payments.
In the meantime, the Commodity Futures Trading Commission (CFTC), which is quickly becoming the odds-on favourite to become chief crypto regulator ahead of the SEC, announced that it is elevating its FinTech and Crypto office, LabCFTC, into a new regulatory arm called the Office of Technology Innovation. LabCFTC was previously known as the Office of Technology Innovation.
The Chairman of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, has been making efforts to obtain more authority over cryptocurrencies, which the SEC has maintained for a long time should be under its jurisdiction.
Even if cryptocurrencies are classified as commodities, they may be still securities; nevertheless, the Securities and Exchange Commission (SEC) will have a harder time arguing this point in court.
According to a story that was published by CoinDesk on Thursday, reports of on-again, off-again negotiations of a House plan to regulate stablecoins this year while saving complete crypto legislation for next year are back on (July 27).
Under the terms of the present accord, the Federal Reserve would function as the primary supervisor. Earlier reports suggested that Democratic and Republican representatives had reached a stalemate in their negotiations and that the issue would be tabled until the following year.
The United Kingdom is Going to Regulate Stablecoin Payments.
The incorporation of stablecoins into the monetary system will be made official by new legislation that was presented to the House of Commons in the United Kingdom on July 20.
If it were to become law, it would designate stablecoins and other cryptocurrencies as “Digital Settlement Assets,” which are defined as “digital representations of value or rights that can be utilised for the settlement of payment obligations and may or may not be cryptographically protected.”
The British chancellor, Nadhim Zahawi, stated that the bill would help the United Kingdom remain at the forefront of new technologies and innovations, in addition to providing the stability and certainty that comes with being supervised by the Bank of England (BoE).
He also stated that it will “enable certain types of stablecoins to be regulated as a form of payment in the United Kingdom.”
The law gives the Treasury the authority to supervise the regulation of DSA issuers, exchange platforms, and digital wallet providers, provided that it consults with the Bank of England (BoE), the Financial Conduct Authority (FCA), and the Payment Systems Regulator.
Lack of Staffing at the EU’s Cryptocurrency Regulator
Because the Markets in Crypto Assets (MiCA) regulatory bill is on the verge of being approved by the European Parliament, the Chairman of the European Banking Authority (EBA), José Manuel Campa, has expressed his concern that the agency will not be able to staff a governance and enforcement division in time for the regulations to take effect in 2025.
He cautioned that the creation of a digital regulatory agency would be difficult because there is a worldwide dearth of experts who are informed about cryptocurrencies.
Acceptance of Cryptocurrency for Political Donations
Soon, political candidates running for state and municipal office in California will have the ability to receive campaign contributions in the form of cryptocurrencies, and payment processors will play an important part in this transition.
The new regulation that was just passed by the Fair Political Practices Commission mandates the quick conversion of cryptocurrency to cash.
In addition, contributions have to be processed through a registered processor, who is then accountable for gathering the necessary personally identifiable information from political contributors, such as their names, addresses, vocations, and employers.
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According to a staff study that explains the policy, “requiring committees to use a payment processor that captures the name, address, occupation, and employer of each contribution” will assist ensure that contributor information “may be fully and truthfully provided promptly.”
