Calls for greater transparency in the U.S. cryptocurrency regulatory process are mounting. The latest to join the trend is the Blockchain Association, and the spate of enforcement actions continues as the Securities and Exchange Commission escalates its war against cryptocurrencies.
On Feb. 22, Blockchain Association CEO Kristin Smith said Bloomberg that the crackdown has been a “closed-door” operation targeting specific companies under certain circumstances.
“What we really need is a more open process where we comprehensively look at the entire market. [Regulators need to] figure out the proper way to regulate the different players within the crypto ecosystem and move forward in an open process in which everyone can participate.”
The Blockchain Association is the collective voice of the crypto industry, with around a hundred members that include the main investors, companies, executives and projects in the sector.
“What we need is for Congress to make legislation.”
Blockchain Association CEO Kristin Smith discusses why she has high hopes for Crypto legislation while speaking with Bloomberg. @kaleyleinz https://t.co/udGiCcVqvA pic.twitter.com/eKrtfLbGKB
—Bloomberg Crypto (@crypto) February 21, 2023
Stablecoins need to be addressed
He added that Congress needs to legislate, however the process is very slow and regulators like the SEC are stepping in and taking their own action. The agency has recently focused on stablecoins, as it tries to label everything cryptocurrency-related as a security.
Smith acknowledged the new House subcommittee on Digital Assets, Financial Technology and Inclusion that was announced in mid-January, adding that he was confident in stablecoins.
“This is an issue that Congress has been looking at since 2019, and there have been hearings in both the House and the Senate,” he said before adding, “Last year we came very close to passing bipartisan legislation.”
The work on the stablecoin legislation has been done and is ready to begin, Smith said. Congress just needs to pull the trigger, but nothing happens fast in the bureaucratic circles of American politics.
Address regulatory concerns
The main accusation being made by US (and global) regulators is that cryptocurrencies are used for money laundering and terrorist financing. Smith argued that most centralized exchanges already have strong AML (anti-money laundering) and KYC (know your customer) provisions in place.
He added that there are specialized analytics firms that work with law enforcement and centralized exchanges to find out where the criminals are and where the funds are flowing.
“[Crypto] it is actually much more transparent than what we see in the traditional financial services system.”
“We don’t think there’s a problem there,” Smith said, as US dollars are the primary option for criminals and money launderers. Legislation is needed on the stablecoin and market side, he concluded.
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