According to Intercontinental Exchange Inc (ICE) CEO Jeffrey Sprecher and Senator Elizabeth Warren, most cryptocurrencies in the United States are likely to be regulated as securities.
The renewed focus on regulating cryptocurrencies as securities comes amid the recent implosion of FTX that wiped untold billions from the market, left consumer funds in limbo and damaged crypto’s reputation with regulators and officials.
Sprecher — whose ICE operates the New York Stock Exchange — said confidently at Goldman Sachs Group Inc.’s financial services conference Dec. 6 that crypto assets are “regulated and traded like securities.”
He argued that this will ultimately lead to far greater consumer protection and regulatory oversight over centralized exchanges and brokers:
“What does that mean? It means more transparency, it means client funds are segregated, the broker’s role as broker-dealer is monitored and exchanges are separated from brokers. Settlement and clearing will be separated from the exchanges.”
Spokesman also argued that new regulation for crypto is not strictly necessary as the legal framework regarding securities is already in place and it is “just being implemented more strongly”.
Senator Warren wants to crack the whip
Crypto skeptic Elizabeth Warren is working on a crypto law that would reportedly give the Gary Gensler-led Securities and Exchange Commission (SEC) most of the regulatory authority over the crypto space.
According to a Dec. 7 report by online news outlet Semafor, which cited two unnamed sources close to the matter, Warren’s crypto law is still in its early stages but aims to cover a variety of topics, including taxation, regulation, national security and climate.
In particular, Warren is said to want to impose regulatory requirements such as audited financial statements and bank-like capital requirements.
While specific details about the bill were not disclosed, Alex Sarabia, a spokesman for Warren, confirmed to Semafor that the senator is looking to the SEC.
“She works on crypto legislation and believes that financial regulators, including the SEC, have broad powers to crack down on crypto fraud and illegal money laundering,” Sarabia said.
There has long been a debate among regulators as to which crypto assets should fall under the category of a commodity or a security, with Bitcoin (BTC) being the only asset unanimously considered a commodity due to its truly decentralized nature.
Related: The US CFTC Commissioner is calling for a new category to protect retail investors from crypto
Ether (ETH) has also been discussed as a commodity at times, but with far more resistance. Notably, Commodity Futures Trading Commission (CFTC) chief Rostin Behnam recently retracted his view that ETH is a commodity when speaking at an invitation-only crypto event at Princeton University. He now believes Bitcoin has that status.
Over in the crypto world, MicroStrategy founder and bitcoin maximalist Michael Saylor has taken it a step further by essentially demanding that all non-BTC crypto assets be shut down, arguing that they are “security fraud commit”.
During a Dec. 6 appearance on the PDB podcast, Saylor reiterated his belief that assets like Ripple (XRP), ETH, and Solana (SOL) are all unregistered securities since they were issued and controlled by centralized entities.
The passionate BTC maxi painted a scenario he would like to see, noting that “the best thing for the world would be if the SEC shut everything down”.
Twitter users naturally mocked him for such comments:
Imagine calling yourself a “Bitcoin maximalist” and then calling something an “unregistered security” enforced by governments/nation states
Saylor is awkward and the furthest thing from a cypherpunk
— sassal.eth (@sassal0x) December 7, 2022