Bills Could Change Crypto Enforcement Trend 

On Tuesday (May 3rd), the Securities and Exchange Commission (SEC) announced the expansion of its Crypto and Cyber ​​Assets Unit with an additional 20 positions, for a total of 50 dedicated positions.

This hiring wave, which doubles the size of the team, is probably a prelude to more coercive action by the agency, which has carried out more than 80 cases related to fraudulent and unregistered offers and platforms of cryptocurrency assets since 2017. This it accounts for about 15 cases each month since 2017. the unit was created.

The last two cases were announced on Friday (May 6). In the first case, the SEC charged MCC International in connection with unregistered offers and sales of investment plans called mining packages. In the second case, the SEC imposed a $ 5.5 million fine on Nvidia for inappropriate disclosures about the impact of cryptographic mining on the company’s gaming business.

The expansion of the computer may mean a faster response to the growing growth of the cryptographic market. The SEC must manage new products and services such as non-fungible tokens (NTFs), loan products and cryptocurrency participation, stablecoins, and decentralized financing platforms (DeFi). “By nearly doubling the size of this key unit, the SEC will be better equipped to control irregularities in cryptographic markets,” said SEC President Gary Gensler.

However, the first voice of concern came from within the agency, when Commissioner Hester Peirce tweeted: “The SEC is a regulatory agency with an application division, not an enforcement agency. Why do we lead the application of cryptography?

With more than 4,800 employees working in the SEC, a team of 50 people working in the cryptocurrency unit could hardly be seen as an attempt to turn the agency into an enforcement agency, but Pierce made a valid point. In cryptocurrency, the number of enforcement actions, currently at 80, clearly exceeds the new regulation or guidance adopted by the agency, which is almost none.

The SEC has been criticized for regulating the cryptocurrency industry by enforcement, rather than approving clear rules that establish when a cryptocurrency company must register and disclose its activities. In the future, some legal experts argue, joint investigations between the SEC and the Commodity Futures Trading Commission (CFTC) are likely, given the overlaps in regulatory oversight and the products companies offer.

Read more: SEC Crypto Enforcement Approach may not be enough in the long run

This enforcement trend is unlikely to slow, especially after new hires, but the SEC could use its regulatory powers to provide more clarity in certain areas to reduce the need for enforcement, at least until Congress defines responsibility for agency for the supervision of cryptocurrencies. .

This can happen sooner rather than later. U.S. lawmakers are introducing new legislation to clearly define the roles of the SEC and the CFTC in overseeing cryptocurrencies. On April 28, Republican and Democratic lawmakers introduced the 2022 Digital Commodity Exchange Act in the House, which would extend the CFTC’s oversight powers to cryptocurrency activities through digital commodity exchanges.

However, this bill fails to provide the CFTC with the authority to oversee any type of digital asset, as the SEC still has jurisdiction over cryptocurrency assets or securities that represent some form of ownership or investment in a business.

See also: Bipartisan Bill paves the way for CFTC cryptographic oversight

Another long-awaited bill will be introduced by Sen. Cynthia Lummis, a Republican for Wyo. Senator Lummis, a longtime bitcoin owner, is expected to present a cryptocurrency-compatible bill in the coming weeks that will include detailed regulation on taxes, payments and, most importantly, the definition of digital assets that would help define the roles of the different supervisory agencies.

You might like: The Bitcoin-friendly senator reveals details of the cryptocurrency regulation bill



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