Secretary Yellen On Crypto: Additional Regulation Would Be Appropriate

Treasury speaks

U.S. Treasury Secretary Janet Yellen appeared on CNBC’s Squawk Box yesterday and talked crypto after the recent enforcement actions against Binance and Coinbase. She said, “[Treasury recently] wrote a set of reports in response to the President’s Executive Order to examine the risks inherent in crypto. And we identified a number of risks – some of which – risks to consumes, investors – our laws are already strong. The SEC, The CFTC, other regulators have the ability and tools to protect consumers and investors. I’m very supportive of seeing those agencies use the tools they have. (…) I see some holes in the system where additional regulation would be appropriate. We’d like to work with Congress to see additional regulation pass.” See it.

intro to crypto

A new publication,  “Introduction To Cryptocurrency,” hit the Congressional Research Service database in late May. “Currently, there is no comprehensive regulatory framework for crypto, but regulators may apply existing regulatory frameworks when applicable to crypto,” writes author Paul Tierno, an analyst in financial economics at CRS. Download it (PDF).

Tierno explains several key policy issues facing Congress including: “The regulatory policy debate has focused on whether a regulatory regime that is tailored for crypto is necessary. Other key policy issues can be summed up in three unanswered questions: Is the current authority sufficient, or is congressional action required? If new regulatory authority is required, who should be the primary regulator? Is it better to create a new, overarching structure, or is a refinement of the existing framework sufficient?”

Tierno also wrote the lengthy and detailed “Cryptocurrency: Selected Policy Issues (PDF)” which was released in February. The new “Intro To Crypto” appears to “peel out” a digestable version of his February tome.

europe salivating

In the wake of the U.S. regulatory crackdown on digital assets, Europeans are beginning to salivate at the potential to tilt the global economic order their way. Joachim Schwerin, a principal economist in the European Commission’s department responsible for economic growth tells CoinDesk, “What we hear from businesses is that now a lot of them are looking to grow, to stay safe, and to manage their risks. (…) They don’t know what will happen in the U.S., so they come to us. This is good for us, this is good for competitiveness.” Read more.

commission conflagration

In a dissenting opinion by Republican members of the Securities and Exchange Commission (SEC), Hester Peirce and Mark Uyeda rejected the latest procedural move by the Democratic majority and Commission Chair Gary Gensler.

The Commission denied the “Division of Enforcement’s motion to dismiss proceedings pursuant to Section 12 of the Securities Exchange Act of 1934 against American CryptoFed DAO LLC.” The two argue that this latest directive goes against previous SEC staff guidance. Read their brief statement.

And, see the dismissal -and the Republican minority’s opinion which begins, “The Division and Respondent appear to agree that it should be able to withdraw its registration statement. Because we believe that Respondent’s request to withdraw was effective when filed, and because the new rule announced in the order both appears inconsistent with longstanding Commission practice and invites confusion by raising unanswered questions for companies seeking to register classes of securities under the Exchange Act, we dissent.”

stablecoin hopes

In a profile on Circle and CEO Jeremy Allaire, Allaire is hopeful about the recent stablecoin legislation offered by Republicans beginning in April. “With a bill like this we’ll end up doing more business with banks than we currently do. (…) The banks can’t get involved in this because they’re not authorized, there’s no clear path, and they can’t hold stablecoins on their balance sheets because there’s no way for them to do that under the current rules. So this will actually increase bank adoption of USDC.” Read it.

Chair Gensler

‘Talk to your lawyer’: Coinbase CEO recounts ‘icy’ meeting with SEC Chair Gensler – The Block

Binance Says Gensler Once Offered to Be an ‘Informal Advisor’ – CoinDesk

still more tips

Crypto tug-of-war – Politico

Louis Vuitton to sell €39,000 NFTs – Vogue

Opinion: Matt Levine: The SEC Comes for Crypto – Bloomberg

Opinion: Crypto is dangerous nonsense and should be regulated like smoking, gambling, or pyramid schemes, not granted the dignity of regulation under US securities law – Financial Times

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