The SEC released its regulatory agenda for 2021 and nowhere in it is Bitcoin or cryptocurrency. This is somewhat surprising as I have written in many articles that the SEC seemed really interested in regulating cryptocurrency over the last six months.
Gary Gensler, the chairman of the SEC, had a few comments recently on this:
"This is a quite volatile, one might say highly volatile, asset class, and the investing public would benefit from more investor protection on the crypto exchanges.”
And Elizabeth Warren made the odd claim that regulation is needed because of the climate:
“Bitcoin requires so much computing activity that it eats up more energy than entire countries. One of the easiest and least disruptive things we can do to fight the #ClimateCrisis is to crackdown on environmentally wasteful cryptocurrencies."
I am not here to argue one way or the other on the climate, but, it was going to be a stretch for the SEC to step in with that as their reasoning.
I think the most important takeaway from this announcement is not that we can all breathe a sigh of relief, it is that the reason we are not seeing action is because the government still cannot decide who has authority. Another quote from Gensler:
“There's a lot of authority that the SEC currently has in the securities space, and there are a number of cryptocurrencies that fall within that jurisdiction but there are some areas, particularly bitcoin-trading on large exchanges, that the public is not currently really protected."
In essence, someone should do something, but, maybe not us.
This is a short-term roadblock for added regulation. If there is anything we know about the US government, is that it suffers from one of the greatest cases of “Scope Creep” in the history of bureaucracies. My guess is that as they will fumble around in D.C. trying to figure a way to regulate crypto and what they will end up doing is creating a new branch of the SEC (or a whole new government agency) and give them full reign over the crypto world. It is just a matted of time, and if Bitcoin rebounds to 100,000 anytime soon, expect it to happen sooner rather than later.
(On a side note, the SEC stated it is going to be attacking short selling after all the #wallstreetbets blowback. While not crypto related, it will be interesting to see if this ends up as a protection for hedge funds by regulating smaller investors, or an actual look at what I think is predatory investing by billionaires.)
Thanks for stopping by.