Authorities around the globe are doing their best they can to implement tighter regulations on the crypto sector. Securities and Exchange Commission (SEC) have called the space a financial “Wild West” in the past due to heavy risk involved in digital assets. Recently, Patrick McHenry, representative from North Carolina and currently a ranking member of the House Financial Services Committee reintroduced a bill to establish innovation offices for monetary services.
Companies Need To Comply With CFTC or SEC
He said in an announcement that he had previously presented this bill in 2016 and 2019. It was centered around helping the innovators including those who deal with digital assets. The organizations can apply for “enforceable compliance agreement” with government bodies like CFTC and SEC.
Federal agencies like the Office of the Comptroller of the Currency have revealed their strategies to set up innovation offices while keeping fintech as their prime focus. SEC has already launched a Strategic Hub for Innovation and Financial Tech during 2018, while CFTC did something similar in 2019.
Regulators are actively trying to take command over different aspects associated with the cryptocurrencies, especially due to the heavy volatility in these assets. The Wall Street Journal recently reported that the New York Department of Financial Services issued a document which will assess activities related to virtual currencies posing a risk to the consumers.
Elizabeth Warren, a United States Senator from Massachusetts, and Roger Marshall, Senator from Kansas, introduced a bipartisan bill dubbed Digital Asset Anti-Money Laundering Act of 2022. The bill is focused towards eliminating the risk crypto assets pose to US national security by bringing virtual currencies within the regulations of the financial system.
In October 2022, Organization of Economic Cooperation and Development (OECD) presented a transparency framework regarding cryptocurrencies to G-20. The initiative came following the backdrop against increasing cryptocurrency adoption. The agency also forwarded some amendments associated with the Common Reporting Standards (CRS) to G20.
There are several bills the authorities have created to tighten grip over the cryptosphere. Since the inception of digital assets the space has offered extremely high profits to the investors. This attracted a lot of other users into the space, but several digital currencies have delivered high losses to them too.
Since the fall of Terra UST, and FTX recently, governments have increased their attention towards crypto regulations. There are over 22,000 digital currencies in the market but not all of them can be deemed authentic. Many projects are involved in development of ecosystems that are suitable for the users, but the fact that anyone can create a crypto asset, allows malicious actors to come up with fake coins and tokens to steal investor funds.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.