In an announcement made Friday (December 3rd, 2021), Senator Pat Toomey of Pennsylvania expressed his dissatisfaction on how the SEC has responded to cryptocurrency regulation issues.
Specifically, Senator Toomey was disappointed about how the chair of SEC - Gary Gensler - responded to inquiries about certain specific cryptocurrency aspects, namely - stablecoins, and tokens. This made the Senator turn to Congress, and ask for an intervention, should the SEC fail to provide proper regulatory information on how these assets should be classified - as commodities, or as securities.
Crypto regulation has been a very hot topic for some time now. However, with no specific actions taken by the SEC, and a lack of clarification, the crypto space is still seen as being a “free for all”, at least to a certain extent.
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This is true in regards to the various scams and rug pulls happening within the space, as well. A lack of specific regulation means that there are close-to-no implications to the malicious third parties performing them.
The issue of influencers not disclosing that they are being paid to shill a project or a coin falls under the “lack of regulation” umbrella, as well. Many fear that this will lead to stricter and broader regulations, when they do come, and will thus send the space to further uncertainty.
Senator Pat Toomey had this to say regarding the matter:
"For investors to benefit from a fair and competitive marketplace, federal agencies should answer questions about whether — and if so, how — new and emerging technologies fit under existing regulations. Chairman Gensler’s failure to provide clear rules of the road for cryptocurrencies underscores the need for Congress to act.”
This news is said to be part of the reason why Bitcoin - and, following that, the rest of the cryptocurrency market - has experienced a “flash crash” during the weekend. Crypto coin and token prices plummeted, and are yet to reach back to their former-high position.
Congress has not taken any action regarding cryptocurrencies, still. At the same time, some experts believe that the regulations will actually eventually come from the SEC, and not the Congress itself.
Depending on the classification of stablecoins and cryptocurrency tokens, both retail and large-scale investors are going to be impacted. The classification would bring with it specific taxation laws, too, which would then likely alter many parties’ trading and investing habits.
Aside from the looming uncertainty, many experts do agree with Pennsylvania Senator Pat Toomey in regards to the fact that crypto needs to be regulated more closely, and that the confusion surrounding asset classes should be cleared, with the different intricacies explained.
Aside from certain crypto purists, many believe that proper regulatory measures would actually bring in mass adoption to the space in a faster and more-efficient manner, and would also allow governments to issue their own digital currencies.
With proper and clear regulations, crypto would become much more approachable to the average person, and would like finally shed its long-lived reputation of being money used by hackers and scammers, and other criminals. Once again, however, the emphasis here should be placed on “proper regulation”, since many people fear something known as “over-regulation”.
Whether Congress will act on Senator Pat Toomey’s calls for action is still uncertain.
