Regulators from the U.S. Securities and Exchange Commission met with cryptocurrency industry leaders on Monday to debate financial oversight and user privacy. This is an element of the agency's ongoing efforts to shape oversight of digital assets.
In the opening remarks of the roundtable, SEC Commissioner Hester Peirce, who also leads the agency's crypto task force, together with Chairman Paul Atkins and Commissioner Mark Uyeda, explained how regulators could balance investor protection and privacy concerns as blockchain-based financial activity increases.
Atkins said crypto has the potential to turn into “probably the most powerful financial surveillance architecture ever invented,” depending on how the U.S. government handles regulation. He pointed to the SEC’s previous approach of “treating every wallet like a broker” and requiring more transactions to be reported.
SEC Commissioner Hester Peirce speaks on the roundtable on Monday. Source: SEC
Peirce echoed Atkins in her statement, suggesting that regulators “have to rethink when and the way financial transactions are monitored” because the crypto market grows.
“Our nationwide deterioration in financial privacy and the foundations that embody it’s exceptionally overdue, and crypto helps to drive a reassessment,” Peirce said, adding that crypto “opens up latest opportunities for transactions without financial intermediaries which might be central to our existing financial surveillance paradigm.” […].” She continued:
“On the opposite hand, as previously mentioned, the general public blockchains on which many crypto transactions happen are visible to everyone, making a need for privacy protection tools.”
The oversight and privacy roundtable, attended by representatives from privacy token Zcash (ZEC), the Blockchain Association and the Crypto Council for Innovation, was the duty force's sixth event to debate various facets of digital asset regulation and policy since Peirce founded the group in January.
Many within the cryptocurrency industry have raised the alarm about privacy because the market continues to grow and regulators, lawmakers and courts work to handle concerns.
Market structure to reshape SEC authority over digital assets
Given the roundtable discussion and the approaching departure of SEC Commissioner Caroline Crenshaw, time is running out for lawmakers within the U.S. Senate to handle laws that might create a comprehensive market structure for digital assets before 2026.
Early drafts of the bill suggested it could give the Commodity Futures Trading Commission greater authority over cryptocurrencies and alter the SEC's regulatory priorities.
After a market structure bill called the CLARITY Act passed the House of Representatives in July, members of the U.S. Senate are engaged in negotiations to bring the bill to a vote before the top of the yr. As of Monday, it appeared unlikely that the Republican leadership's goal could be achieved.
The Senate Banking Committee and the Senate Agriculture Committee have each released discussion drafts of their respective versions of the bill. However, on the time of publication, there was no hearing on the value increase on the Banking Committee's schedule because the chamber shall be on break for the following few days resulting from the vacations.
