The previous Chief of the US Securities and Trade Fee (SEC) Workplace of Web Enforcement, John Reed Stark, said an ongoing “unprecedented monetary regulatory onslaught” in opposition to the US crypto area.
On August 10, Stark took to social media platform X making these claims primarily based on the crypto-related insurance policies set by sure US monetary regulators in the previous couple of years.
Former SEC Chief Speaks On New Fed Program
Firstly, John Reed Stark begins his case by highlighting the lately launched “Novel Actions Supervision Program” by the US Federal Reserve (Fed) on August 8.
Based on the previous SEC Chief, a part of this program goals to control US banks’ involvement with dollar-backed tokens such because the lately launched PaypalUSD or different stablecoins.
Beneath the brand new Fed directive, banks aspiring to concern, maintain or commerce dollar-backed tokens should acquire a written supervisory non-objection letter from the American apex financial institution having confirmed their capability to deal with these property in a “protected and sound method.”
Nevertheless, John Reed Stark states this could be a “difficult” process for many conventional banks because the Fed judges their capability to handle the quite a few dangers related to these dollar-backed tokens. These dangers embody cash laundering, buyer runs, and hacks.
Shifting on, Stark pointed to an “aggressive” crypto regulatory coverage by one other conventional regulator – the Federal Deposit Insurance coverage Company (FDIC).
The previous SEC Chief famous in April 2022 that the FDIC wrote a Monetary Establishment Letter (FIL) to all FDIC-supervised banks instructing them to tell the company earlier than dealing in any crypto-related exercise.
Following this notification, the FDIC would study the potential results of those actions concerning client safety and basic monetary stability earlier than granting an acceptable supervisory response.
To John Reed Stark, US crypto customers ought to contemplate the mentioned FIL a “forerunner” of heightened FDIC supervision of all bank-related crypto dealings.
Lastly, Stark attracts consideration to a different comparable order by the US Workplace of the Comptroller of the Foreign money (OCC).
The previous SEC Chief states that the OCC Interpretive Letter No. 1179 mandates all nationwide banks and federal financial savings associations searching for to interact in crypto-related actions to indicate proof of an “satisfactory management system.”
Nevertheless, Stark believes the dearth of a “complete framework” within the US makes this process fairly “puzzling.” Due to this fact, the OCC Letter No.1179 may signify a “harbinger” of the OCC’s bigger imaginative and prescient to limit nationwide banks’ crypto involvement closely.
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US Regulators Setting Sights On Different Digital Asset Sectors
In his closing remarks on the rising regulatory stress on the US crypto area, John Reed Stark notes that the USA monetary regulators have begun extending their oversight past cryptocurrency and different features of the digital asset economic system.
The previous SEC Commissioner highlighted the SEC’s ongoing case in opposition to Coinbase, Binance, and different crypto exchanges to assist his case, which may seemingly “threaten the sovereignty of the decentralized finance (DeFi) ecosystem.”
As well as, Stark additionally pointed to the usage of non-fungible tokens as a goal regulatory web site with NFT-related prosecutions already being led by the US Division of Justice.
John Reed Stark believes an “unprecedented crypto regulatory firestorm” continues to swell exponentially, and all US crypto customers needs to be “effectively conscious.”
Whole crypto market cap valued at $1.136 trillion on the hourly chart | Supply: TOTAL chart on Tradingview.com
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