MCS | Interpretation of Gary Gensler's Regulatory Remarks

MCS | Interpretation of Gary Gensler's Regulatory Remarks


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The Bitcoin price has entered a correction period in recent days, falling about -9.8% from its high on August 1st. The timing is not strange as there has been a period in the past ten days that has been running with a relentless uptrend.

A few days ago, at a cryptocurrency security seminar held in Aspen, USA, on August 3rd, US SEC Chairman Gary Gensler said that the current cryptocurrency market is like the western era when it was lawless, and strong regulations are needed to protect 'investors.' He stressed that he would use his current SEC powers to regulate it.

Will there be any changes due to the regulatory references?

It seems like investors already feel the suppression of the cryptocurrency market will soon begin from the word regulation, which is reflected in the recent Bitcoin price. As the head of the SEC, it can be seen that cryptocurrencies are considered to be subject to management and, at the same time, suggested the direction of regulation to move forward. If so, let's take a look at what specifically mentioned the subject of regulation.

Source: CNBC (CNBC interview aired on August 3rd)

(Interpretation: If a coin is sold to raise money, or if the buyer expects to gain profits from the seller's business efforts, it is considered the securities category.)

First, ICO in the United States. Initial Coin Offering: If there is an IPO in stocks, there is an ICO in coins. Gary Gensler mentioned that all ICO coins are considered securities because they have securities properties. Many coins will fall short of the standard to meet some of the stock listing requirements, which may be terrifying news for coin investors. However, it is worth noting that this statement expressed his position that his predecessor, Jay Clayton, had already mentioned and agreed with that part.

Second, trading exchange. It refers to the exchange that listed coins through ICO. For example, while the attention of financial authorities is focused on exchanges, decentralized exchanges such as Uniswap have listed problematic Stock Coins and then withdrew them again. A Stock Coin can be defined as the coin that is linked 1:1 with a stock. This is seen as a move to manage and supervise whether coins have been listed indiscriminately like this.

In addition, he mentioned that it regulates coin lending companies and stablecoins, DeFi, and custody services (e.g., Robinhood - brokerage and exchange). Realistically, it is almost impossible for the SEC to regulate all these areas in a short period, and it is considered the main target of the regulation mentioned by Gary Gensler is more concentrated on the ICO coins and exchanges described above.

Healthy regulation is essential. The reason is to protect investors and help many institutions make investments safely within the framework of regulations. If the regulation proceeds in a healthy and reasonable direction, wouldn't it be good news for institutions deeply interested in the cryptocurrency market and looking forward to investing?

Traders ALWAYS come first on MCS.

Thank you.

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