Unlike financial institutions, crypto isn't heavily regulated. Many US crypto firms only need to acquire a license to operate in each state. Once you go outside of the US, it's more like the wild west. But with the fall of FTX, crypto regulations are once again at the forefront.
Crypto die-hards are against many suggested regulations, saying such regulations will remove the spirit of crypto - namely anonymity. However, anyone familiar with the details of how crypto works knows that anonymity simply doesn't exist. The FBI has proven this many times over in the process of catching hackers.
With the collapse of FTX, US regulators are coming down hard on crypto firms. The Securities and Exchange Commission (SEC) recently issued a Wells Notice to Coinbase, one of the most reputable crypto exchanges in the US. In February, the SEC fined Kraken for $30 million. Also, in April, it charged Bittrex and its former CEO for operating an unregistered exchange, broker, and clearing agency.
However, it isn't entirely clear what laws US crypto exchanges are supposed to adhere to. The crypto industry does not comply with investor protection standards that exist in other financial markets. There is no regulation saying they must comply with such standards. But if you try to fit existing securities and derivatives laws onto crypto, that doesn't work either. Currently, crypto is in a regulatory no man's land.
So yes, there is plenty of room for improvement, but regulators and Congress can't agree on a clear path forward without regulating crypto out of existence in the US.
However, an example may be found across the pond in the UK, where things are quite different. In about a year, the UK is expected to put into place crypto regulations that are "pragmatic" and "proportionate." The US is dragging its feet on regulations that will allow the crypto industry to thrive. Ultimately, this likely has the effect of driving US crypto exchanges out of the US and to other countries.
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