- The US Army hosted their initial Twitter Space on January 12, 2023.
- The SEC chair and commissioner joined the conversation.
- SEC is involved in a lawsuit against Ripple Labs.
A majority of cryptocurrencies have made it to the mainstream from obscurity real quick. From a civilian to an army officer, everyone knows about how these virtual assets are gaining traction with time. Recently, the US Army hosted their first ever Twitter Space which was joined by the chair of Securities and Exchange Commission (SEC), Gary Gensler, and Caroline Crenshaw, commissioner of the agency.
US Army Seeks Financial Advice
The US Army sought financial advice from the regulators where Gary Gensler again addressed the virtual currency sector as the Wild West. He said that 10,000 to 15,000 of these digital assets will fail. Moreover he also advised them not to get caught in FOMO (Fear of Missing Out) as they are highly speculative and non-compliant.
Instead, the regulators recommended to them the government scheme available for the uniformed servicemen and federal workers, Thrift Savings Plan (TSP). Gary Gensler has long been skeptical of cryptocurrencies and believes that they ought to be treated as securities, similar to the stocks. However, the community has opposed it by saying that virtual currencies do not fall under the category.
The community believes that crypto does not adhere to the Howey Test, a standard to determine whether transactions qualify as securities. According to the test, an asset should be an investment contract, having expectations of profit, should be in a common enterprise, and derived as via others efforts.
Gary Gensler was fascinated by the virtual currencies upon their emergence. He believed that technology can bring revolution in the financial sector. During a lecture in Massachusetts Institute of Technology (MIT), he addressed Satoshi Nakamoto as “Nakamoto-San,” a respectful gesture.
But the current SEC chair has become a crypto nemesis primarily due to the risks this market possesses. The US regulatory watchdog is currently involved in a lawsuit against Ripple Labs, which the experts believe, can deliver a huge impact to the sector. The XRP community thinks that the agency may not gain favor in the case.
The virtual asset market is going through a hard time, particularly after the fall of Terra UST and FTX in 2022. In 2021, the sector saw market cap reaching $3 Trillion with several assets seeing their all time high. This is an indication of how volatile the digital asset market is, creating skepticism among the investors. However, many nations around the globe are working on Central Bank Digital Currencies (CBDC) which would offer more security than crypto assets.