Cryptocurrencies are more prominent than ever and are proving to be an integral part of the global economy. With such scale comes regulation and this past Wednesday, the Commodity Futures Trading Commission met to discuss crypto’s role in the American economy and the ever-increasing spread of fraud and market manipulation.
In remarks at the Chainanalysis Links conference, Chairman of the CFTC, Rostin Beham stated that of all of the digital cases the organization is investigating, half of them are crypto-related cases. In total, more than 23 crypto-related cases are now being investigated by the CFTC, nearly half of its enforcement actions involving digital assets since 2015.
CFTC Chairman, Rostin Beham went on to say,
“Headlines about the loss of tens of millions of dollars in digital assets due to protocol exploits, phishing attacks, preying on vulnerable people and other fraudulent and manipulative schemes have become far too common.”
Reinforcing the idea that both institutional and retail investors are frightened and perhaps regulation might be the best option for the embattled crypto market right now. From ongoing fraud, stable coin collapse, and an overall skittish crypto market, now is the time to calm fears and introduce frameworks that will work.
CFTC Will Increase Agency Crypto Enforcement
Since the confirmation hearing of Chairman Beham, the New York native has been pushing for wider-reaching legislation to wrangle any loose strings in the crypto community. In particular, market manipulators as well as crypto protocols where fraud was being committed. For example, in the case of minor stable coins that claim to have assets that are never audited or double-checked.
The G7 will be meeting later this week as well to discuss regulation in Europe. French Central Bank head Francois Villeroy de Galhau said on Tuesday that the incident involving the collapse of the Luna and TerraUSD value systems can never happen again in the way that it did. And that the G7 or the seven finance chiefs will be reviewing several plans to prevent such a situation from occurring in Europe.
On the other side of the ocean, Washington is preparing for another showdown in front of the Senate Finance Committee because Treasury Secretary Janet Yellen urging lawmakers to pass a new regulatory framework for cryptocurrencies. Senator Pat Toomey, the top-ranking congressional official in Pennsylvania and top Republican on the Senate Banking Committee stated he and his party would also be pushing for wider legislation governing the impact of cryptocurrencies on the American economy.
Ron Hammond, Director of Government Relations at the Blockchain Association echoed Washington and the G7s increased scrutiny of the blockchain community, saying,
“The markets last week caught the eye of D.C., … There’s definitely a group of investors who lost a lot of money, and that does elicit concern from folks on Capitol Hill.”
Concluding Thoughts on Crypto Government Oversight
As we digest and internalize what happened last week with the failure of the Terra and Luna, governments will continue to meet to create frameworks to better protect the retail investor. And perhaps that isn’t such a bad idea, as the crypto market becomes larger, so too do the pillars that uphold it need to increase in strength and size.
Maybe, just maybe these new regulations will add a bit of mental security to an already shaken market. Now more than ever, retail investors and institutional ones need to be reminded that everything is going to be all right. That the failure of one stable coin does not represent the entire market’s ability to safely hold value.