The SEC is confident that new law is necessary as a result of the numerous crypto platform collapses in recent years. According to the US regulator, limits must be imposed on the cryptocurrency industry to prevent the overall economy from becoming unstable. In light of this, it has put out a set of regulations that it believes would improve sector control. Coinbase replied right afterward, insisting that the new regulations would not apply to the company.
On February 14, the SEC made a fresh proposal for rules for a specific kind of cryptocurrency firm public. These organizations provide their services as certified institutional fund custodians. After the SEC’s disclosure, Coinbase said that these regulations would not have an impact on its business model.
Coinbase Seems Like it will Brush off the Regulators
The chief legal officer of the corporation declared that no modifications would be necessary to comply with the rules. Paul Grewal confirmed that Coinbase is already compliant and using the proper safeguards to protect assets. He also said that Coinbase should serve as a model for other cryptocurrency firms.
In the past, Coinbase has frequently argued that its business practices differ from those of its rivals. Hence, Grewal’s most recent remarks only restate these ideas. Meanwhile, the chief legal officer of Coinbase tweeted in favor of the SEC‘s choice. By pointing out that nothing is fixed in stone and that everything may still change, he praised the endeavor.
The Regulations are a Strain on the Cryptocurrency Market, but the Regulators Keep on Insisting
SEC Chairman Gary Gensler recommended that pressure should be used on the cryptocurrency market. The structural issues related to how the latter typically manages customer funds were then brought up by him. “Make no mistakes,” he said: “Investment advisers cannot depend on them as competent custodians based on how crypto platforms normally work.” It must be acknowledged that the legislation under development may compel cryptocurrency businesses to enhance financial security. They will need to offer assurances that the client’s assets are kept separate from the money required for their business.
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