Calls for more transparency in the process of crypto regulation in the U.S. are mounting. The latest to join the trend is the Blockchain Association, with the spate of enforcement action continuing as the Securities and Exchange Commission ramps up its war on crypto.
On Feb. 22, Blockchain Association CEO Kristin Smith told Bloomberg that the crackdown has been a “behind closed doors” operation targeting specific companies for certain circumstances.
“What we really need is a more open process where we look comprehensively at the entire marketplace. [Regulators need to] figure out the appropriate way to regulate different actors within the crypto ecosystem, and move forward in an open process where everyone can participate.”
Blockchain Association is the collective voice of the crypto industry, with around a hundred members that include the sector’s leading investors, companies, executives, and projects.
“What we need is for congress to do legislation.”
Blockchain Association CEO Kristin Smith weighs in on why she has a lot of hope for Crypto legislation as she speaks with Bloomberg’s @kaileyleinz https://t.co/udGiCcVqvA pic.twitter.com/eKrtfLbGKB
— Bloomberg Crypto (@crypto) February 21, 2023
Stablecoins Need Addressing
She added that Congress needs to legislate, however, the process is very slow, and regulators such as the SEC are stepping in and taking their own action. The agency has targeted stablecoins recently as it attempts to label everything associated with crypto as a security.
Smith acknowledged the new House subcommittee on Digital Assets, Financial Technology, and Inclusion which was announced in mid-January, adding that she was confident about stablecoins.
“This is an issue that Congress has been looking at since 2019, and there have been hearings in both the House and Senate,” she said before adding, “last year we came really close to getting some bipartisan legislation done,”
The work on stablecoin legislation has been done and is ready to go, Smith said. Congress just needs to pull the trigger, but nothing happens fast in the bureaucratic circles of American politics.
Addressing Regulatory Concerns
The main accusation that U.S. (and global) regulators make is that crypto is used for money laundering and terrorism financing. Smith argued that most centralized exchanges already have sturdy AML (anti-money laundering) and KYC (know your customer) provisions in place.
She added that there are specialized analytics firms that work with law enforcement and centralized exchanges to figure out where the criminals are and where the funds are flowing.
“[Crypto] is actually much more transparent than we see in the traditional financial services system,”
“We don’t think there is a problem there,” Smith said, as US dollars are the primary choice for criminals and money launderers. The legislation is needed on the stablecoin and market side, she concluded.
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