SEC Faces Heat Over Crypto Rules as Lawmakers Question Regulation Gaps
TL;DR
- The SEC faced intense criticism during a congressional hearing for its unclear regulations on cryptocurrencies, leaving firms like Robinhood in regulatory limbo.
- Lawmakers highlighted issues of fraud in the crypto industry and questioned the SEC's handling of its first crypto broker-dealer, Prometheum Inc.
The U.S. Securities and Exchange Commission (SEC) endured significant backlash during a recent congressional hearing regarding its approach to cryptocurrency regulation. Former Commissioner Daniel Gallagher emphasized the difficulties faced by crypto firms, particularly Robinhood, which struggled to comply with SEC rules and faced potential enforcement actions despite its efforts to register for crypto activities.
Gallagher expressed frustration over the ongoing regulatory uncertainty, stating, "We have to look over our shoulder left and right because of this regulatory uncertainty." He argued that while Congress is responsible for providing long-term clarity, the SEC could take immediate action to help firms navigate the current landscape.
Lawmakers also scrutinized the SEC's management of Prometheum Inc., its first special purpose broker-dealer for crypto, and raised concerns about the SEC's recent legal battles, particularly with Binance. Additionally, Democratic lawmakers pointed out the alarming prevalence of fraudulent activities within the crypto sector, including issues related to former President Donald Trump's crypto project.
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