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January 31, 2024

Better Markets Month in Review Newsletter – January 2024

Below is the opening of our monthly newsletter. View the full newsletter online here

Hi friend,

The Securities and Exchange Commission (SEC) is one of the most important financial regulatory agencies created after The Great Crash of 1929 and the Great Depression of the 1930s. It was intended to end the rampant fraud and manipulation that caused those two historic events and, since then, has been fairly successful in protecting hardworking Americans from financial predators while ensuring the markets are well-regulated so that capital can fuel economic growth and job creation.

But new business activities, practices, schemes, and scams continue to arise while others evolve, which is why the SEC must continue to be proactive in protecting retail investors, markets, and financial stability. In just the last year, this has included changes to make SPAC IPOs more transparentmarket structure reforms to address the worst abuses we saw during the GameStop trading frenzy, and rules to reign in the lawless crypto industry. In these and many other actions, our team has worked tirelessly to push the SEC to strengthen financial rules that protect Main Street American’s wallets and pocketbooks.

While it has an admirable record over the last few years, the SEC failed to follow its mission to protect investors and markets when it approved Bitcoin ETPs earlier this month. When that happens, it’s our job to hold policymakers and regulators accountable, which is exactly what we did in this case.

We repeatedly explained that this approval of a Bitcoin ETP was an historic mistake that will not only unleash crypto predators on tens of millions of investors and retirees but will also likely undermine financial stability. It will be interpreted and spun as a de facto SEC – if not U.S. government – endorsement of crypto generally.

With the action, the crypto industry’s marketing machinery can be expected to claim or imply that this decision legitimizes crypto as a safe and appropriate investment for hardworking Main Street retail investors and those saving for retirement. This is deeply disturbing given the SEC’s actions have changed nothing about this worthless financial product: Bitcoin and crypto still have no legitimate use; remain the preferred product of speculators, gamblers, predators, and criminals; and continue to be cesspools of fraud, manipulation, and criminality.

The SEC’s decision is a stark reminder that special interests — whether they be the money-soaked crypto lobby, the powerful megabanks on Wall Street, or the financial titans of high frequency trading — are relentlessly trying to influence the policymaking process, and push their priorities above those of the American people. That’s why it’s vital to have substantive experts like Better Markets to be a counterweight to those special interests.

There was also a lot of activity at the banking agencies, with the comment period of the much anticipated capital rules coming to a close this month (read our comment letter here).  Bank capital is critical to protect Main Street families, jobs, small businesses, and community banks, as well as the financial system and the economy. While the bankers fight to protect their bonuses, our team will continue to fight against the banking industry’s propaganda campaign filled with false claims about capital.

With your help, we’ll continue to stand up to special interests and hold all of government accountable.

Ben

Benjamin Schiffrin
Director of Securities Policy, Better Markets

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