Never Let a Crisis Go to Waste
For the first time in maybe ever, a US lawmaker and/or government official actually has a seemingly good idea on crypto regulations. Yes, you read that right.
You might not know Wyoming Senator Cynthia Lummis, but you might want to soon.
Senator Lummis has taken the uproar and utter fiasco of the FTX scheme/fraud/whatever is going on down there and used the crisis to leverage the introduction of a fresh new digital asset regulation bill. Key tenants of her proposition include:
- Ban on comingling of customer assets with an exchange’s (duh)
- Use of the Howey Test within the cryptocurrency market
- Distinct sets of regulations around those who actively trade crypto on exchanges vs. those who store their assets in hard wallets
Not bad, Lummis, not bad.
Now, the bill does go into far more depth than presented above. Key tenants also include less consumer-facing aspects such as collateralization and rehypothecation.
With all that said, we still, of course, have no idea how bright (if at all) this bill’s future is. Public opinion has taken a dramatic turn against cryptocurrencies and the digital asset industry as a whole, so passing supportive legislation could come with electoral risk.
One thing is clear, however—this is a step in the right direction. Simply the fact that Congress is no longer outright ignoring one of the most pivotal technological and financial developments of the last decade and a half is a real breath of fresh air.
Like it or not, the crypto industry does probably need regulation to bloom to its full potential.
The big question: Will bills like this kickstart the development of much-needed, smart crypto regulation?
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