2022 is nearing an end and might go down as one of the most eventful years for the crypto industry owing to the prolonged winter that had wiped more than 70% of the market cap from the top and the barrage of crypto firms imploding. This was mainly due to internal mismanagement and unchecked decision-making process.
Among all the ups and downs, one thing has remained clear — retail customers have lost a significant amount of money due to a lack of regulatory oversight.
While lawmakers in the United States promised to bring crypto under regulatory purview many times this year, after every major crypto fallout like Terra and FTX, we see another round of regulatory discussions without any concrete action.
The role of regulators has been heavily scrutinized in the wake of FTX’s collapse due to the close ties between former CEO Sam Bankman Fried and policymakers. Some reports indicate that eight congresspeople, five of whom received donations from FTX, tried to stop the Securities and Exchange Commission from investigating FTX.
Breaking: 8 Congress Members tried to stop the SEC from inquiring into FTX by questioning the SEC’s authority to inquire about Crypto
5 of those 8 members also received campaign donations from FTX, ranging from $2,900 to $11,600
— Nancy Pelosi Stock Tracker ♟ (@PelosiTracker_) November 25, 2022
Coinbase CEO Brian Armstrong was not very pleased with regulators’ failure to avoid another contagion and claimed that enforcement action against U.S.-based companies for the irregularities committed by an offshore crypto exchange makes no sense.
Armstrong also blamed the SEC for failing to come up with timely regulations, driving out nearly 95% of the trading activities to offshore exchanges.
https://t.co/0HxlRiI6Sy was an offshore exchange not regulated by the SEC.
The problem is that the SEC failed to create regulatory clarity here in the US, so many American investors (and 95% of trading activity) went offshore.
Punishing US companies for this makes no sense.
— Brian Armstrong (@brian_armstrong) November 10, 2022
Jim Preissler, co-founder of decentralized exchange service provider SOMA.finance, explained that most don’t fully understand the role of regulators such as the SEC.
He told Cointelegraph, “The SEC sets rules and guidelines. For example, the SEC has been repeatedly clear that other than perhaps Bitcoin, they see every other crypto offering as a potential security. Violators then face potential enforcement, and in…
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