Crypto regulations remained the hot issue across the crypto space and the point of tussle between regulators and crypto proponents. Yet the authorities or the people having authority are often reported to look into the matter and find opportunities.
Senator Kneading Crypto Issues
Recently a Democrat Senator, Elizabeth Warren reported sniffing out the similar possibility while researching crypto related issues. The sources suggest that the range of crypto related issues that the Senator is looking at include taxation, regulations, threat on national security and climate as well.
Senator citing the recent instance of crypto exchange FTX filing for bankruptcy seeking the regulations. She had a firm belief that criminals and the people involved in the illicit activities use crypto for money laundering and avoid taxes.
No need to mention that she dubbed crypto as ‘the new shadow bank’ last year. She termed cryptocurrencies as the asset class for criminals.
Indication of Possible Crypto Regulation?
The Senator’s research around crypto assets is inferred as the efforts in the wake of a potential crypto regulation bill. It is expected to include a variety of potential regulations expected to make it tough for retail traders to deal with crypto trading.
Potential crypto regulation would make it obligatory for exchanges to provide the audited financial statements and broker-dealers statements. This indicates towards imposing capital requirements like in the banking system that intends to provide traders with a safeguard. Also there would be an increase in requirements of tax reporting.
An amendment would also refrain crypto exchanges or other related firms from using their customer funds for any earning purposes like lending or investments. This is exactly what FTX is accused of doing. It is paradoxical though given that the business model of banks is the same.
The entire economy could collapse if cryptocurrency is not controlled, Warren said in late November. Financiers with more experience, including Fed governor Lisa Cook, were less dramatic. She claimed earlier this month that the absence of a crypto contagion in traditional finance rendered additional laws unnecessary.
The Massachusetts Senator also urged Attorney General Merrick Garland, head of the Department of Justice, to open a full criminal inquiry into FTX.
Recently, a number of lawmakers have advocated for stricter rules that resemble those in traditional finance. However, if cryptocurrency were governed similarly to banking and TradFi, investors would be subject to the same limitations.
Additionally, it would limit financial freedom by requiring intrusive paperwork, requesting personal data, and monitoring crypto account holders by the government.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/12/08/democrat-senator-seeking-potential-crypto-regulations-report/