Former SEC Chief Warns of Regulatory Onslaught on US Crypto Space
The former Chief of the US Securities and Exchange Commission (SEC) Office of Internet Enforcement, John Reed Stark, has raised concerns about the increasing regulatory pressure on the US crypto space. Stark argues that US financial regulators have been implementing new policies that could heavily impact the crypto industry.
Key Points:
- The US Federal Reserve introduced the “Novel Activities Supervision Program” to regulate US banks’ involvement with dollar-backed tokens like PaypalUSD or stablecoins.
- Banks must obtain a written supervisory non-objection letter from the Fed to issue, hold, or trade these tokens.
- The Federal Deposit Insurance Corporation (FDIC) has implemented an aggressive crypto regulatory policy, requiring banks to inform the corporation before engaging in any crypto-related activity.
- The FDIC will examine the potential effects of these activities on consumer protection and financial stability before granting supervisory approval.
- The US Office of the Comptroller of the Currency (OCC) has mandated national banks and federal savings associations to demonstrate an adequate control system for engaging in crypto-related activities.
- The lack of a comprehensive framework in the US makes complying with the OCC’s mandate challenging.
- US financial regulators have extended their oversight beyond cryptocurrency to other aspects of the digital asset economy, including non-fungible tokens (NFTs).
Hot Take:
According to John Reed Stark, an unprecedented crypto regulatory firestorm is brewing in the US. The increasing scrutiny from financial regulators could have significant implications for the crypto industry, including decentralized finance and NFTs. US crypto users should be well aware of these developments and the potential impact on their activities.
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