The US banking behemoth JP Morgan is speaking out by urging the US government to regulate the cryptocurrency ecosystem in the wake of recent SEC litigation against cryptocurrency exchanges. The risk, according to the bank, is that a sector that generates billions of dollars would leave the United States for markets elsewhere.
SEC v. JP Morgan
The recent SEC legal action against cryptocurrency platforms does not appear to have been taken lightly by JP Morgan, and as a result, the bank has requested that the ecosystem be subject to specific regulation. The biggest bank, with a $413 billion market valuation, is now supporting the crypto sector’s move towards a US-centric future as a result of this.
A legislative framework is now required to stop a capital flight of cryptocurrency abroad in the wake of the SEC’s onslaught on cryptocurrency companies like Binance and Coinbase. After what occurred to the crypto businesses, JP Morgan claimed in a recent research that it is now vital to develop:
A detailed framework for regulating the crypto ecosystem, outlining the SEC’s and the CTFC’s (Commodity Futures Trading Commission) respective roles in this regard
Additionally, the group of financial experts led by the managing attorney of the bank, Nikolaos Panigirtzoglou, has contended that:
It is difficult to determine which cryptocurrencies fall under the legal definition of “security,” as used in SEC litigation
Fearing a severe legal blitz, a number of cryptocurrency exchanges and service companies operating on US soil have abandoned their plans. Robinhood, EToro, Crypto.com, and others are only a few of them.
In contrast, Binance and Coinbase, who have more resources and access to the legal system than their rivals, have forcibly forced themselves by petitioning the courts to hear their arguments and denying the SEC’s allegations.
The court’s decision to deny Gary Gensler’s plea to have Binance’s assets frozen, however, seems to have given the cryptocurrency sector a point.
Can the SEC Chair avoid expulsion?
In order to voice their objections, a number of cryptocurrency supporters have demanded Gary Gensler be removed from his post as the SEC chairman. Some of them include two US Representatives, Warren Davidson and Tom Emmer, who formally introduced a bill to the House called the “SEC Stabilization ACT,” calling for the individual’s resignation and reform of the entire federal agency.
Warren Davidson mentioned in a statement:
A despotic chairman, including the current one, must be stopped from dominating the US capital markets.
Emmer, on the other hand, is said to have referred to the SEC chairman as “a regulator in bad faith”, underlining the inconsistencies in his conduct with regard to the best interests of investors.
The proposed bill is intended to both modernize the commission and lay the groundwork for a separation of politics and regulation. This is done by creating the executive director role and prohibiting any party from having a majority on the commission.
There is no denying that as the days pass, the pressure on the SEC Chairman grows more. Due to his inability to control the $8 billion financial collapse in FTX last year, the SEC chair has been obliged to examine his conduct.
Gensler, however, was thrust back into the public eye after his counter-response when it turned out that he had previously applied for a compliance position at Binance. According to current rumors, the SEC chairman started the whole issue as payback for the major platform’s CEO ChangPeng Zhao (CZ) being rejected. The white collar is surrounded and cannot make mistakes any longer if he wants to keep his job.
