The need to enact stricter crypto laws to guide the industry has recently become a top priority. It is however not surprising as there has been a high surge of crypto exchange collapse in the past few months. This implosion, particularly that of the defunct FTX stems from human factors, and lack of proper regulations and not from the technology of blockchain itself.
John E. Deaton, a cryptocurrency lawyer gave his thoughts on Twitter concerning the state of regulation in the US. Deaton claims the United States has been left behind in terms of the passage of crypto regulations into law. As a result, he stated that enacting crypto into law by US legislators may take some time. He predicted this may become a reality at the earliest in the first half of 2025.
I’ve seen some very smart people say things like:
“When we get regulation soon….”
I hate to be a Debbie Downer about politics in the U.S., but I don’t see sensible Crypto regulation being passed into law anytime soon.
— John E Deaton (@JohnEDeaton1) January 22, 2023
He highlighted that the US crypto market will continue to make decisions based on guidance received from the Securities and Exchange Commission (SEC). Deaton, therefore urged industry players and stakeholders to come together to fight the only SEC enactment policy.
Deaton’s call to fight the only SEC enactment policy may have originated from SEC’s victory over LBRY Inc. The SEC initially sued LBRY Inc. in March 2021 over its LBRY Credit (LBC) tokens, alleging that the company had been conducting unregistered securities offerings since 2016.
The SEC admitted that many LBC token holders did not view LBC as an investment and instead used the token for personal consumption. Deaton, however, claims that the LBC is a utility token and not an investment for users.
The Involvement of SEC in the Crypto Market
The United States has an SEC policy on crypto regulations because the SEC has the authority to regulate securities, which can include digital assets that meet the definition of a security.
The SEC’s involvement in the cryptocurrency market is ongoing, and the agency continues to monitor developments in the space. The SEC recently reported an increase in crypto enforcement actions in 2021. The increase, therefore, shows the need to enact tighter laws to guide investors in the industry.
The SEC still has an ongoing case with Ripple. The SEC filed charges against Ripple for raising funds from investors through the unregistered issuance of digital assets securities.
Ripple’s CEO, Brad Garlinghouse has however said the XRP token is not a security and hinted that the lawsuit may come to a close soon.
