Fans of cryptocurrencies were left empty-handed after the Securities and Exchange Commission (SEC) released its spring and summer agenda last week, in which the topic of crypto regulation was non-existent.
Gensler Comments Raised Expectations
Expectations that the top US regulator will finally address the need for regulation of cryptocurrencies and raise the level of investor protection in the markets were high, following recent comments from SEC chair Gary Gensler who stated that consumers would only benefit from regulation of exchanges.
Gensler appeared before the House Financial Services Committee in May to discuss how regulation for cryptocurrency exchanges could protect investors, directing the issue towards Congress since currently, the SEC does not consider Bitcoin and certain other cryptocurrencies as securities.
“Right now, there’s not a market regulator around these crypto exchanges and thus there’s really no protection around fraud or manipulation.”Gary Gensler, Chair, SEC
And while the SEC agenda discussed issues like crafting and finalizing rules for special purpose acquisition companies (SPACs) that started to lose investor appeal in the gaming sector recently, short sale disclosures, money market reforms, and gamification features on some trading platforms, there was no mention of cryptocurrencies. The SEC agenda is organized into three stages: pre-rule, proposed rule and final rule.
Still Possibility to Touch the Issue
One way for the SEC to possibly discuss crypto is during the proposed rule-making for trading platforms related to gamification features, while another could be during discussions on exempt offerings in a pre-rule process: under the proposed “safe harbor” for cryptocurrencies, according to the proposal maker SEC Commissioner Hester Peirce, projects with tokens that might be considered as securities would be given a time-limited exemption from filing with the SEC.
Both possibilities to touch the issue of cryptocurrency regulation look like long shots at the moment as the agency does not seem to be preoccupied or in a hurry to introduce regulation in the sector and raise the level of protection for investors.
While not showing any direct interest in crypto regulation, the SEC continues to monitor the sector, having issued a warning to investors Thursday that Bitcoin futures represent a significant amount of risk due to their “highly speculative investment” nature.
According to a May report from Cornerstone Research, the SEC dished financial sanctions amounting to over $1.7 billion to cryptocurrency companies so far, with allegations related to fraud and offering of unregistered securities such as the token proposed by Telegram, TON, and the sale of EOS token by Block.one.