US crypto industry may be in for a tough regulatory battle
The US regulatory war against crypto is heating up with an expected avalanche of enforcement actions from various US departments.
The latest enforcement action by the US Securities and Exchange Commission (SEC) targeted the Kraken crypto exchange.
February 9, Gary Gensler’s agency accused the company that sells unregistered securities through its bet-as-a-service product.
As a result, Kraken was hit with a $30 million fine and ordered to shut down its betting services.
On February 10, IBC Group founder Marion Nawfal speculated that a “myriad of enforcement” actions targeting exchanges, banks and tokens were on the way.
Crushing crypto by enforcement
Still, the SEC isn’t the only agency cracking down on crypto. The New York Department of Financial Services (NYDFS) is reportedly investigating stablecoin issuer Paxos. However, the details of the probe were not clear, but a spokesperson from the Financial Supervisory Authority told Bloomberg:
“The department is in continuous contact with regulated entities to understand vulnerabilities and risks to consumers and the institutions themselves from the volatility in the crypto market we are experiencing,”
Paxos is the company behind the issuance of the third largest stablecoin, Binance USD (BUSD).
Furthermore, there have been reports from the Office of the Comptroller of the Currency (OCC), a federal banking regulator, asking Paxos to withdraw its application for a national trust bank charter. On February 9, Paxos refuted the rumours.
US financial regulators have been accused of a heavy-handed approach and regulation of crypto in enforcement. Earlier this week, Coinbase’s CEO warned that there would be an exodus of talent and innovation from the US if this continues. On February 9, he has warned about the SEC’s bet attempt just before the Kraken was hit.
“We’re hearing rumors that the SEC wants to get rid of crypto betting in the US for retail clients. I hope that’s not the case, as I think it would be a terrible road for the US if that were to happen.”
SEC Commissioner reprimands SEC
On February 10, SEC Commissioner Hester Pierce publicly scolded her own agency, saying that “using enforcement actions to tell people what the law is in an emerging industry is not an effective or fair way to regulate.”
Crypto markets have fallen following the news, with total market capitalization falling 5.2% on the day. As a result, the total crypto market capitalization had fallen to $1.06 trillion, and many altcoins had double-digit losses.
Disclaimer
BeInCrypto has reached out to the company or person involved in the story for an official statement on the latest development, but has yet to hear back.
