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Gary Gensler Strives Control Over Crypto With New Proposed Rule

  • SEC Chair aims to accelerate the proposed crypto regulations to expand the SEC's jurisdiction over the crypto sector.

  • The proposed regulation will also give the SEC broader authority over cryptocurrency firms and exchanges.

  • While regulations are essential for crypto market growth, forced regulation and increased SEC scrutiny have an influence on growth.


25 Jan 2023 By : COIN GABBAR
Gary Gensler Strives

The Securities and Exchange Commission (SEC) has continued its anti-crypto attitude and increased scrutiny on cryptocurrency companies. 

SEC Chair Gary Gensler wants to accelerate the proposed "Regulation Best Execution" to expand the SEC's jurisdiction over the crypto sector. It will also give the SEC broader authority over cryptocurrency firms and exchanges.

Why Does the SEC Chair Want a "Best Execution" Rule?

To strengthen the present regulatory framework, the SEC suggested "Regulation Best Execution" under the Securities and Exchange Act of 1934 (Exchange Act). It will implement a "best execution" criterion for brokers, dealers, government securities brokers, government securities dealers, and municipal securities dealers to boost investors’ confidence.

Gary Gensler, in a tweet on January 25, urged people to submit comments on the plan by March 31 in order to implement this required regulation for brokers and dealers immediately. If implemented, the rule will put in place policies and processes for trading securities such as shares, fixed income, options, crypto security tokens, and others.

“If approved, our best ex rule will assist in ensuring that brokers have policies and procedures in place to respect one of their most critical obligations: to seek the best execution while dealing securities, whether equities, fixed income, options, crypto security tokens, or other assets.”

However, the rule will expand the SEC's jurisdiction over cryptocurrencies, which has yet to be decided by the US Congress. Previously, the SEC defined cryptocurrency exchanges as "brokers" for the purpose of obtaining broker-dealer registration under Section 15 of the Securities Exchange Act of 1934. The CFTC and the cryptocurrency community both opposed the action.

While regulations are essential for crypto market growth, forced regulation and increased SEC scrutiny have an influence on growth. The rule will give the SEC more authority over cryptocurrency firms.

SEC Prevents Cryptocurrency Firms from Going Public

Several cryptocurrency companies, including Bullish Global, Circle Internet Financial, and eToro, have been denied SEC regulatory certification to go public. 

Other publicly traded companies, including Mike Novogratz's Galaxy Digital and Coinbase, have been under criticism after their first public offering. Following the demise of FTX, the SEC has gotten more rigorous.

Also read: Stablecoins & CBDCs Can Play a Meaningful Role in the Payments Space: Visa CEO


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