SEC Chair Gary Gensler Seeks Jurisdiction Over Crypto With New Proposed Rule
The Securities and Exchange Commission (SEC) has maintained its anti-crypto stance and increased scrutiny on the crypto companies dwindled their growth and public listing. SEC Chair Gary Gensler looks to expedite the proposed “Regulation Best Execution” to increase its jurisdiction over the crypto market. It will also make the SEC having more control over crypto firms and exchanges.
Why SEC Chair Wants “Regulation Best Execution” Rule?
The SEC proposed “Regulation Best Execution” under the Securities and Exchange Act of 1934 (Exchange Act) to enhance the existing regulatory framework. It will introduce a “best execution” standard for brokers, dealers, government securities brokers, government securities dealers, and municipal securities dealers to increase investor protection.
Gary Gensler in a tweet on January 25 urged people to submit their comments to the proposal until March 31 to immediately introduce this mandatory rule for brokers and dealers. If adopted, the rule will implement policies and procedures when trading securities such as equities, fixed income, options, crypto security tokens, or other securities.
“If adopted, our best ex rule would help ensure that brokers have policies & procedures in place to uphold one of their most important obligations: to seek best execution when trading securities, whether equities, fixed income, options, crypto security tokens, or other securities.”
However, the rule will increase the SEC’s jurisdiction over cryptocurrencies, which is yet to be decided by the U.S. Congress. Earlier, the SEC defined cryptocurrency exchanges as “brokers” to obtain broker-dealer registration pursuant to Section 15 of the Securities Exchange Act of 1934. The move was criticized by the CFTC and the crypto community.
While regulations are crucial for crypto market growth, forced regulation and heightened scrutiny by the SEC impacts growth. The rule will provide more control over crypto firms to the SEC.
SEC Stops Crypto Firms To Go Public
Several crypto companies including Bullish Global, Circle Internet Financial, and eToro have failed to receive regulatory approval from the SEC to go public. Other listed companies such as Mike Novogratz’s Galaxy Digital and Coinbase are under scrutiny since listing. The SEC has become more strict following the collapse of FTX.
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