JAKARTA - The legal framework for cryptocurrencies has been eagerly awaited for years without any clear certainty. One of the Barclays executives stated that this happened because regulators thought digital assets would just disappear.
The lack of adjusted rules has led the US Securities and Exchange Commission (SEC) to target crypto through "regulation through law enforcement," not by issuing clear guidelines, as industry figures say.
In fact, over the past 10 months, US agencies have stepped up law enforcement efforts against crypto after the sudden failure of leading companies such as Celsius, Voyager and FTX. Regulators often file lawsuits against companies after they file bankruptcy, so users (and their funds) are neglected.
Some policymakers let the market "do what it wants to do because they thought the market would die by itself," said Nicole Sandler, head of digital policy at Barclays, recently at a fintech conference in London as reported by Decrypt.
"And apparently, the crypto market did not die, instead it grew and grew," he added.
Sandler was part of a 2016 discussion on the legal framework for digital assets with the European Commission. While acknowledging that the industry was still in its early stages at the time, he stressed that that that was not the regulator's reason to avoid setting rules.
"It's not that the industry is still early so it can't be regulated, but because regulators choose to see where the market will move," Sandler said. "And now they know they have to regulate it. However, the problem is that regulation takes a long time from start to finish."
Blockworks recently reported the top three US banking agencies, including the Federal Reserve, stated that risks related to the crypto sector should not seep into the banking system. They warn that agencies that issue or hold digital assets are "very likely inconsistent with safe and healthy banking practices."
Separately, the SEC gave Wells a notification to Coinbase, which accused federal securities law violations. A few days later, Binance was charged by Commodity Futures Trading Commission on alleged avoidance of trade and derivative rules.
Since 2013, the SEC has fined more than $2.6 billion to crypto startups, while the long SEC court battle with Ripple seems to determine how crypto is regulated going forward.
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