Former SEC head and treasury undersecretary defend US crypto regulations
The regulatory pressure is mounting in the U.S., with more politicians questioning whether the current framework is adequate.
An opinion piece, written by former SEC Chairman Jay Clayton and former Undersecretary of the Treasury Brent McIntosh, for Wall Street Journal has defended the United States’ existing regulatory apparatus regarding crypto and warned that excessive rulemaking could stifle innovation.
The discussions arose as cryptocurrencies came to the regulatory spotlight once again in the wake of two crippling ransomware attacks in the U.S. Over the weekend, two senators deliberated on the prospect of banning cryptocurrencies as a solution to the ransomware attacks.
Jay Clayton, served as SEC head from May 2017 until December 2020, stated that the agency did not take up Bitcoin regulation because the asset was not declared to be a security before he took up his position as its head. He has remained in the industry following his departure from the SEC and currently advises One River Asset Management on cryptocurrencies.
Brent McIntosh was the Under Secretary of the Treasury for International Affairs from September 2019 until January 2021, previously serving as General Counsel to the Department of the Treasury between 2017 and 2019.
The duo emphasized the challenge of finding a pragmatic regulatory balance that ensures basic consumer protections without stifling the crypto industry’s growth, warning that the sector could easily be subjected to excessive or insufficient regulatory oversight while praising existing guideline:
“Existing regulatory frameworks provide the tools to address many of the risks of new technologies without stifling their promise.”
The pair advised lawmakers to ground their efforts in the principal objectives underpinning existing financial regulations which include financial stability and the prevention of fraud and illicit activity. They concluded that a coordinated approach is required that ensures the U.S. retains its role as a financial leader:
“A prompt, coordinated approach to regulatory clarity that builds on our existing knowledge base will empower responsible innovation and ensure that the U.S. financial system continues its leadership role in the formation of capital, the provision of credit, and the maintenance of stability on which the modern global economy depends.”
SEC chairman Gary Gensler also hinted at greater regulatory oversight for U.S. crypto exchanges earlier this May.