Crypto

Former SEC Chief Points To Ongoing United States Crypto “Regulatory Onslaught” Amidst New Fed Program

The previous Chief of the United States Securities and Exchange Commission (SEC) Office of Internet Enforcement, John Reed Stark, mentioned a continuous “unprecedented financial regulatory onslaught” versus the United States crypto area. 

On August 10, Stark required to social networks platform X making these claims based upon the crypto-related policies set by specific United States monetary regulators in the last couple of years. 

Former SEC Chief Speaks On New Fed Program

Firstly, John Reed Stark starts his case by highlighting the just recently presented “Novel Activities Supervision Program” by the United States Federal Reserve (Fed) on August 8. 

According to the previous SEC Chief, part of this program intends to control United States banks’ participation with dollar-backed tokens such as the just recently introduced PaypalUSD or other stablecoins.

Under the brand-new Fed instruction, banks meaning to release, hold or trade dollar-backed tokens need to get a composed supervisory non-objection letter from the American peak bank having actually shown their capability to manage these possessions in a “safe and sound manner.”

However, John Reed Stark states this would be a “challenging” job for the majority of conventional banks as the Fed judges their capability to handle the many threats related to these dollar-backed tokens. These threats consist of cash laundering, consumer runs, and hacks.

Moving on, Stark indicated an “aggressive” crypto regulative policy by another conventional regulator – the Federal Deposit Insurance Corporation (FDIC).

The previous SEC Chief kept in mind in April 2022 that the FDIC composed a Financial Institution Letter (FIL) to all FDIC-supervised banks advising them to notify the corporation prior to handling any crypto-related activity.

Following this alert, the FDIC would analyze the prospective impacts of these activities concerning customer security and basic monetary stability prior to approving a suitable supervisory action. 

To John Reed Stark, United States crypto users need to think about the stated FIL a “forerunner” of increased FDIC guidance of all bank-related crypto transactions. 

Finally, Stark accentuates another comparable order by the United States Office of the Comptroller of the Currency (OCC).

The previous SEC Chief mentions that the OCC Interpretive Letter No. 1179 requireds all nationwide banks and federal cost savings associations looking for to participate in crypto-related activities to reveal proof of an “adequate control system.”

However, Stark thinks the absence of a “comprehensive framework” in the United States makes this job rather “puzzling.” Therefore, the OCC Letter No.1179 might represent a “harbinger” of the OCC’s bigger vision to limit nationwide banks’ crypto participation greatly. 

Related Reading: Ripple Vs. SEC: Does The Appeal Letter Jeopardize XRP? Lawyers Disagree

United States Regulators Setting Sights On Other Digital Asset Sectors

In his closing remarks on the growing regulative pressure on the United States crypto area, John Reed Stark keeps in mind that the United States monetary regulators have actually started extending their oversight beyond cryptocurrency and other elements of the digital possession economy. 

The previous SEC Commissioner highlighted the SEC’s continuous case versus Coinbase, Binance, and other crypto exchanges to support his case, which might likely “threaten the sovereignty of the decentralized finance (DeFi) ecosystem.” 

In addition, Stark likewise indicated making use of non-fungible tokens as a target regulative website with NFT-related prosecutions currently being led by the United States Department of Justice.

John Reed Stark thinks an “unprecedented crypto regulatory firestorm” continues to swell significantly, and all United States crypto users need to be “well aware.”

Total crypto market cap valued at $1.136 trillion on the per hour chart | Source: overall chart on Tradingview.com

Featured image from Freepik, chart from Tradingview



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