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In June, the Thomson Reuters Institute and Thomson Reuters Regulatory Intelligence published a Special Report: Cryptos on the Rise, which looked at the state of crypto assets, their risk and regulation, and how their impact and acceptance is evolving around the world. The report included a Compendium of Country-by-Country Crypto Regulations.
Since publication, much has transpired globally in crypto regulation, warranting a special recap of the report that focuses on U.S. regulation, ahead of a global update next year.
Although the U.S. Securities and Exchange Commission (SEC) is sure to play a central role in the regulation of digital assets, rules, guidance and enforcement actions brought by other authorities are already beginning to take shape. For example, federal regulators have begun staking out their territory for regulating digital assets while several states have raced ahead with their own laws. Like much U.S. financial services regulation, there is significant jurisdictional overlap, and the well-established concept of a “regulatory patchwork” is beginning to unfold for cryptos.
Several states and other federal regulators such as the Commodity Futures Trading Commission (CFTC) and the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), Office of Foreign Assets Control (OFAC), and Office of the Comptroller of the Currency (OCC) are all moving forward to regulate cryptos in their respective areas of authority.
The White House is also considering broad oversight of the cryptocurrency market to combat ransomware and other cybercrimes. This push includes a planned international security gathering on the issue, and reportedly may result in an executive order. Lawmakers on Capitol Hill have also called for coordination of regulations.
Federal regulators seek crypto oversight
Indeed, the SEC went from no mention of cryptos in its annual regulatory agenda in June, to requesting more resources and authority from Congress, while also announcing several enforcement actions. SEC Chair Gary Gensler said the agency would work with Congress, the Biden administration, and fellow regulators to close regulatory gaps, saying the SEC has “taken and will continue to take our authorities as far as they go.”
The SEC has brought several cases related to the offer and sale of unregistered securities offerings and other alleged fraudulent activity involving crypto-assets. Unregistered-securities ases were brought against Blockchain Credit Partners, and Poloniex, while a public spat with the largest crypto trading platform in the country, Coinbase, captured headlines after the company said the SEC warned it against launching its new lending product, which Coinbase then scrapped….