US bank JP Morgan is making its voice heard by asking the US government for regulation for the crypto industry after the SEC recent tyrannical pasts.
The risk, according to the banking giant, is to see an industry that processes billions of dollars, move to other markets outside the States.
Let’s look at all the details together.
JP Morgan: if the US fails to provide crypto regulation, the industry will move abroad
JP Morgan doesn’t seem to have really taken well the latest legal action taken by the SEC against cryptocurrency exchanges, asking the government for dedicated regulation for the industry.
Thus the world’s largest bank with a market capitalization of $413 billion has taken sides, backing the crypto industry toward a US-centric future.
In particular, following the Securities and Exchange Commission’s attacks on Binance and Coinbase, there has emerged the need to establish a legislative framework to prevent a flight of crypto capital abroad.
In a research report released last week, JP Morgan said that after what happened, it became urgent to develop:
“a comprehensive framework on how to regulate the crypto industries and the relative responsibilities of SEC vs the Commodity Futures Trading Commission (CFTC).”
The team of financial analysts headed by the bank’s managing counsel, Nikolaos Panigirtzoglou, argues that it is not easy to decree with absolute certainty which cryptocurrencies fall under the nomenclature of “security,” which is so much used in SEC lawsuits.
In particular, the federal commission would classify as securities many of the major high-capitalization cryptocurrencies listed on a long list of exchanges operating in the US, complicating the operational situation for them.
Many crypto exchanges and service providers offering their services on US soil have backed out fearing a legal punitive expedition.
Prominent names such as Crypto.com, Robinhood and Etoro stand out among them.
Binance and Coinbase, on the other hand, which have far greater resources and legal means than the other competitors, have forcibly imposed themselves by asking the courts to hear their arguments, rejecting the SEC’s charges.
In recent days, the courts appear to have given the crypto industry a point, having rejected a request by Gensler to freeze the assets held by Binance.US.
In addition, a warning was given to the federal agency to respond to Coinbase’s request regarding regulatory clarity of its allegations, which will now have to submit a formal explanation within 120 days.
In any case, until clear and transparent solutions are found for crypto operators, activities will most likely begin to move faster and faster to different legislation and decentralized entities.
Perhaps the SEC’s intent is just that: it doesn’t know it can win the battle, but it wants to carry it as long as possible to inflict permanent wounds on the industry such as loss of investor confidence.
The SEC does not want regulation of crypto in the US
Unlike JP Morgan, the SEC seems to want to obstruct the formulation of dedicated regulation for the crypto industry by going through the legal channels and relying on old laws from more than 90 years ago.
While ludicrous at times, the intention of the US Securities and Exchange Commission seems to have been carefully planned: to hinder the advancement of the crypto industry in order to facilitate the entry of CBDC.
Behind these acts of violence, there should be an explanation rooted on the political front.
In this regard, many have expressed their opposition by calling for an expulsion of Gary Gensler from his role as chairman of the SEC.
Among them, two US Representatives, Warren Davidson and Tom Emmer, have formally submitted an act to the House called the “SEC Stabilization ACT” calling for the person’s dismissal and reform of the entire federal agency.
The first of the two politicians mentioned stated the following in a statement:
“US capital markets must be protected from a tyrannical Chairman, including the current one.”
Emmer reportedly called Gensler a “regulator in bad faith,” highlighting the contradictions of his actions in what is the common interest of investors.
The proposed bill, in addition to reforming the commission, would create the conditions for a departure of the political sphere from the regulatory one by preventing any party from having a majority on the commission and adding the position of executive director.
The pressure on the chairman of the SEC gets increasingly intense as the days go by.
Since November, Gensler has been forced to review his actions as a result of his failure to handle the $8 billion financial crash by FTX in advance.
But now, following his counter-response, he has been put in the spotlight again after it emerged that he had a history being a candidate for compliance at Binance.
There has been speculation in recent days that the SEC chairman triggered this whole mess just to retaliate from the rejection of CZ, CEO of the cryptocurrency exchange.
The white collar has been cornered and can no longer commit missteps if he wants to save his tenure.
The whole world of crypto enthusiasts is waiting for news from the case and can’t wait to read the SEC’s reasoning towards Coinbase’s request for more explanation
Source: https://en.cryptonomist.ch/2023/06/18/crypto-regulation-jp-morgan-vs-sec/