We already know about the SEC’s proposal. And the crypto world is not happy. It’s not surprising, because if the United States Securities and Exchange Commission manages to enforce its regulation, the role of many exchanges and cryptocurrency companies will change radically.

What will they need to do? The body, led by Gary Gensler, has voted to expand custody requirements for financial assets, including cryptocurrencies. They will need to register to protect and store these assets. In other words, it means that practically any exchange or person wanting to hold crypto has to go through the regulatory body and get its approval.

It is the most aggressive step taken by the CMB towards this sector. It’s a change that affects many, from stock exchanges to private investors.

You are not on the list. We are used to such movements in Europe. Similar to Big Tech being required to register as a fintech company, in the United States the SEC requires companies that manage financial instruments (“securities tokens”) to register on a list. A record that determines whether certain requirements have been met.

Some crypto companies/investors will pass the filter, some will not. Having the backing of a financial institution, being registered as an exchange operator or futures broker are some of these requirements. So, introduce yourself as a finance manager.

For some it will be bureaucracy, for others impossible obstacles. Other applications include expanding written agreements between custodians, more potential for surprise audits, and increased regulation affecting records.

Gensler explains that most crypto investors can continue to work as custodians qualified. However, these requirements are not possible for others.

Blockchain Association asks Congress to decide. SEC is equivalent to CNMV in Spain. It is a regulatory body, but it is Congress that ultimately decides the type of laws to be enforced. That’s why Jake Chervinsky, president of the Blockchain Association, asked Let’s discuss this politically.

This doesn’t seem to change the situation much. Like points tony edwardcrypto analyst, if the SEC and other agencies are so determined to act on this, it’s because they got the green light from the Biden Administration.

The SEC refrains from engaging in an important dispute that needs resolution. One point that the SEC regulation does not address is the fact that cryptocurrencies are ‘security tokens’. This technical aspect, which has profound implications for the level of demand and control that can be applied to cryptocurrencies, is one of the things discussed in the crucial SEC lawsuit against Ripple over XRP. Depending on what the judges decide, one or the other will add arguments to defend their position.

Coinbase wants to be the white knight of crypto. The only publicly traded US crypto company is Coinbase. Also, Coinbase Custody Trust Co. are registered as a qualified custodian under the program. Messages from Brian Armstrong’s company are welcome. While arguing that ‘stacking’ should not be prevented, they are sending the message in line with the SEC’s decision to establish a registry of operators.

“We agree on the need for consumer protection; as a reminder, our clients’ assets are segregated and protected in all cases,” they explain from Coinbase. Coinbase isn’t doing well either, but they believe that “regulatory clarity will ultimately benefit us.”

The SEC is getting a lot of hate this week, but some companies like Coinbase are already doing just fine. The philosophy of cryptocurrencies was precisely to escape from central financial institutions, but they do not live it easy.