The Securities and Exchange Commission (SEC) has maintained its anti-crypto stance, and increased scrutiny of crypto companies has reduced their growth and listing on the stock exchange. SEC Chairman Gary Gensler is looking to fast-track the “better regulatory enforcement” proposal to increase his proficiency in the crypto market. It will also allow the SEC to have more control over crypto companies and exchanges.
Why does the SEC chairman want the ‘best regulatory execution’ rule?
The SEC has proposed “Best Regulatory Execution” under the Securities and Exchange Act of 1934 (Exchange Act) to improve the existing regulatory framework. It will introduce a “best execution” standard for brokers, dealers, government stockbrokers, government stockbrokers and municipal stockbrokers to increase investor protection.
Gary Gensler in a Tweeter Jan. 25 urged people to submit comments on the proposal until March 31 to immediately introduce this mandatory rule for brokers and traders. If passed, the rule will implement policies and procedures when trading securities such as stocks, fixed income securities, options, crypto security tokens or other securities.
“If passed, our best ex rule would help ensure that brokers have policies and procedures in place to meet one of their most important obligations: to seek best execution when trading securities, whether it’s stocks, fixed income, options, crypto security tokens or other securities.”
However, the rule will increase the SEC’s jurisdiction over cryptocurrencies, which has yet to be decided by the US Congress. Earlier, the SEC defined cryptocurrency exchanges as “brokers” to obtain broker registration under Section 15 of the Securities Exchange Act of 1934. This move was criticized by the CFTC and the crypto community.
While regulations are crucial for the growth of the crypto market, forced regulation and increased SEC scrutiny are impacting growth. The rule will provide more scrutiny over crypto firms to the SEC.
SEC Blocks Crypto Firms From Going Public
Several crypto companies, including Bullish Global, Circle Internet Financial and eToro, have not received regulatory approval from the SEC to go public. Other listed companies such as Galaxy Digital and Mike Novogratz’s Coinbase have been under scrutiny since listing. The SEC has become stricter following the collapse of FTX.
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