The United States SEC Surprised Cryptonians!

US Financial authorities finally released their new regulations.

A statement made by the legendary investor who holds a multi-billionaire profile of cryptocurrency, Paul Tudor Jones told in an interview, “Bitcoin is math, and math has been around for thousands of years. Two plus two is going to equal four and it will for the next two thousand years. I like the idea of investing in something reliable, consistent, honest, and a hundred per cent certain.”

Not long ago, when investors and crypto bulls were concerned and uncertain about the new regulatory laws of the US. While the US financial regulators were busy figuring out what exactly should be the perfect manner to oversee this extremely volatile market, journalists had already announced that the financial authorities are preparing for something big. The goal for them was, the authorities must take part actively in regulating the 1.5 trillion dollars! The market of cryptocurrency. Will proper implementations take place which will abate the risks and harms of the investors?

Well, the US regulations for the cryptocurrency market have been launched- ‘The security and exchange commission (SEC) will not regulate Bitcoin and other cryptocurrencies in 2021. It will rather lay its focus on short-selling (the topic has attracted heated debates as the craze for this keeps growing in the meme stock with GameStop and AMC theatres)’. Later we will mention the sales regulations launched along with this, but, let us first discuss why did the US take such a hands-off approach? This could not be more good news, as we know if it wanted to take control of this market, it had all the authority in the world to do so but they specifically didn’t.

There are two prevalent reasons for this: First, the US doesn’t want to fall behind China (which is quickly to become a superpower), neither do they want to fall behind Russia (considering the recent recently launched digital “Ruble” and made donations to western countries to strengthen their international position). We can comprehend that the USA doesn’t want to lose its hegemonic position in the international platform. The desire for continued leadership is a clear sign made through such a smart move. In the nineties the tech revolution took place which included the internet and the dot com stocks, they are aiming for something similar. Second, in the recent few years, we may notice that ‘bitcoiners’ and ‘cryptonians’ are reaching a high position of power and authority. In this particular case, the best example held here is Gary Gensler.

Assuming to determine that you have heard the name of ‘Gary Gensler’. He is currently the SEC chair. Who a few weeks ago he told and here quoting his words, “gaps in our current system” aiming to reach the best way to legislate this market and also told that he aims to provide “similar protections to the exchanges where you trade crypto assets as you might expect at the New York Stock Exchange or Nasdaq”. He was formerly a professor. Anyone may search his tutoring YouTube videos, they will end up on MIT’s YouTube channel where there are hours of his class regarding various topics on finance, cryptocurrency, UX-UO, crypto payment, blockchain system, &c. This individual has an elaborate and clear idea of this domain. He understands the risks and impossibilities of the market and hence, embraces cryptocurrency.

However, no one should think or assume that scams will go unnoticed or overseen due to this law launched by the SEC. Trades which fall under this legislation [Quoting from Global Legal Insights]:

  • “Constitutes the sale of a security under state or federal law, or
  • Is considered money transmission under state law or conduct otherwise making the person a money service business (‘MBA”) under Federal law.”

 Hundred percent of coins on the crypto market cap are going to be traded smoothly without any trouble under SEC. But, if your crypto is unregistered security, then it might be fined.

To justify this statement let us take EOS ICO as an example here. It was known as it raised the biggest market in 2018 (most probably) of about 4 billion USD. It was launched as unregistered security and it faced a lawsuit as a consequence. After the procedures were held, they were penalized to pay an amount of 27.5 million USD as a fine (although, it is nothing compared to what they had raised).

In my personal opinion, this was an extremely significant step to encourage investors of cryptocurrency, only time will state the result of this intended ‘perfection’.

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