WASHINGTON, D.C.— Legal Director and Securities Specialist Stephen Hall issued the following statement on Better Markets’ fact sheet addressing crypto regulation, ahead of House Financial Services and House Agriculture Committee hearings on the future of crypto regulation.
“As lawmakers consider the path forward on crypto regulation, they must evaluate the failed promises of the industry and the carnage, manipulation, and outright fraud we have seen in recent years, costing investors trillions of dollars in losses. Many of the victims have been individual retail investors swept up in the hype, which makes it even more important that these financial products are properly regulated.
“Notwithstanding crypto’s deplorable track record, the industry’s promoters and allies are clamoring for special treatment under the law. But policymakers should provide regulators with the resources they need to enforce the laws already on the books rather than rewriting the rules at the behest of the crypto industry. The vast majority of cryptocurrency offerings are securities, and securities regulation must be the first line of defense in protecting consumers and markets. The SEC must continue to aggressively enforce all of the available laws and regulations that apply to the crypto space, including the registration requirements and the antifraud provisions set forth in the securities laws. And the SEC must be adequately funded to do the job. The CFTC also has a role to play, as it has the authority to police the derivatives markets, including crypto-based futures, options, and swaps. In addition, it can address fraud and manipulation in the underlying commodities markets.
“To the extent there are any gaps in the regulatory and enforcement tools applicable to cryptocurrencies, they are narrow, and they do not warrant an overhaul of the current system of financial regulation or special carve-outs from the current framework. Above all, it would be a mistake to deprive the SEC of securities jurisdiction over cryptocurrency offerings, weaken its authority, or transfer that authority to an agency such as the CFTC. Other policy solutions to the challenge of cryptocurrency regulation that have surfaced are also unwise and unwarranted because they would legitimize a risky and largely lawless sector without providing the safeguards that are necessary to adequately protect investors and markets.”
Read the Fact Sheet here.
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes [Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
