Why does US legislation flunk the cryptocurrency litmus test?

The United States of America is a witty country. They have so many financial regulators that we frequently end up with ineffective financial regulation.

Bitcoin and its brothers have become too large to be disregarded — and yet that is exactly what has happened. There is no reliable government information on prices, availability, or fluctuation. Crypto exchanges are governed by no one body. Nobody can be certain that merchants are adequately secured.

Many in the conservative cryptocurrency ecosystem are unsure when the federal government will intervene. Mike Novogratz, a fund manager who helped lead the charge into the investment market, told CNBC that there may be “relief” in the marketplace once legal standards are established, and encouraged Congress to appoint Gary Gensler, the chairman of the Securities and Alternate Fee, to the position.

“When Gary lastly addresses it, will probably be good,” Novogratz mentioned of his fellow Goldman Sachs alumnus. “He would love to manage all of the crypto. He doesn’t have the mandate.”

All of this adds up to a classic American process failure.  The fundamental issue is that financial supervision in the United States is disjointed. There are several national banking and trading agencies with lines of accountability, as well as government regulatory approaches. “There isn’t any one actual authority that may co-ordinate all of the transferring elements and bridge variations.” JPMorgan Chase CEO Jamie Dimon wrote in his annual letter to shareholders.

Crypto is difficult to handle since it is difficult to define. Cryptocurrencies are referred recognized as “cryptocurrencies” by genuine believers, although they are viewed differently by US regulators. Bitcoin, for example, has been classified as a product. Different cryptos are regarded as investments.

That misunderstanding helps to explain why neither the SEC nor the Commodity Futures Trading Commission is directly supervising financial institutions like Coinbase. The inspectors are irritated because no one has offered them the job.
Congress is on the matter, as is customary. Senator Elizabeth Warren, a Democrat, wrote to Gensler earlier this month, asking if the SEC “has the correct authority to shut current gaps in regulation that go away traders and customers weak to risks on this extremely opaque and unstable market”. The answer from Gensler, which is due on July 28, will surely be compelling. However, whether or whether it will motivate legislators to act quickly is another question.