The recent havoc in the crypto market devastated by the collapse of Terra has brought stablecoins back into the limelight. As of now, the next move by America’s top financial watchdog (Security and Exchange Commission) on crypto regulations is unclear.
An SEC commissioner revealed in a recent interview that stablecoin regulations may not fall under the jurisdiction of the SEC, and the US Congress has looked into the matter to provide guidelines.
Congress has a role to play
Just a day after SEC Chairman Gary Gensler warned crypto investors that Terra would drop more coins to nearly zero, a disaster that could hurt many investors, Commissioner Hester Peirce also warned about stablecoins and other cryptocurrencies. I weighed the rules.
Pearce, known for her pro-crypto stance, said in an interview that she personally would like to see a clear SEC-introduced regulatory framework for the industry, but at the same time, it is not something within the authority’s jurisdiction. It is possible
“Stablecoins may or may not be under the jurisdiction of the SEC, but the facts and circumstances matter… this is something Congress is looking into.”
Because of the size of the impact caused by Terra’s crash, he said, Congress can work quickly to enact new rules on the industry.
When asked about the jurisdiction of crypto regulations between the SEC and the Commodity Futures Trading Commission (CFTC), which oversees the derivatives market, Peirce acknowledged that some aspects are still unclear, and for this reason, Congress has to There may be a need to specify the relevant area of responsibilities.
She also used the example of “broker-dealers” or “investment advisors” who want to work with crypto as part of the areas where the SEC should step in and provide regulatory clarity. Furthermore, when the SEC asked about doubling down on its crypto enforcement team to strengthen protections for crypto investors, the commissioner said it would put more resources on the “regulatory and compliance side.”
The SEC’s Role in Elon Musk’s Twitter Bid
In the interview, the commissioner also answered a question about the SEC’s jurisdiction when it comes to Elon Musk’s bid on Twitter – which is currently on hold. She explained that the commission is a disclosure regulator that ensures disclosure is compliant with its regulations, but the authority is not a “qualification regulator.”
Last week, Elon Musk halted the acquisition of Twitter due to issues related to fake accounts and scams on the popular social media platform. Reportedly, the highly anticipated deal was put on hold pending details supporting the claim that spam and fake accounts account for less than 5% of total Twitter users.
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