Bitcoin's price touched a low of $62,112, nearly breaking the 62,000 threshold. SEC Chairman Gary Gensler highlighted that the crypto market is plagued with fraud and investors aren't getting the necessary information disclosures. CFTC Chairman Rostin Behnam predicted that the next cycle of cryptocurrency enforcement actions will occur within six months to two years.
The crypto market is facing setbacks, particularly after Gensler appeared on CNBC. In a recent interview, he emphasized that most cryptocurrencies "are securities under U.S. Supreme Court interpretations, according to local law." He believes investors are not getting the "required or needed disclosures" before acquiring these assets.
According to court documents released on May 6, the SEC has issued a Wells Notice to popular trading platform Robinhood regarding its U.S. crypto business. Other crypto companies have also recently become targets of the Department of Justice and regulators, including Samourai Wallet.
In addition, the developers of crypto wallet MetaMask, Consensys, and the decentralized exchange Uniswap stated that they received Wells Notices from the SEC last month.
The U.S. crackdown on the industry and companies serving the region has led many businesses to prevent U.S. citizens from participating in airdrops, accessing decentralized financial front-ends, or engaging in certain markets. However, regulators cannot stop the inflow of funds into regulated assets like Bitcoin spot ETFs, meaning the overall impact of this "fear, uncertainty, and doubt" (FUD) on the crypto market might be less than expected.
Rostin indicated that as retail investors' interest in cryptocurrencies grows and the market value increases, enforcement actions will also rise.
He predicted that the next cycle of cryptocurrency enforcement actions will occur in the next six months to two years. At the 27th annual Milken Institute Global Conference on Monday, he said, "From my perspective as a regulator, I believe we may see another enforcement action cycle within the next six to 18 months, or six to 24 months, because of this wave of asset appreciation and increasing retail investor interest."
He added, "In the absence of a regulatory framework and transparency, and with regulators lacking the necessary tools, we will continue to see fraud and market manipulation."
When asked about the likelihood of passing a stablecoin bill, he indicated the chances are slim. He explained, "If we're talking percentages, I still think the chances are relatively low."
He noted that the number of legislative days in Congress is decreasing between election season and the holidays.
Previously, House Financial Services Committee Chairman Patrick McHenry and California Democratic Representative Maxine Waters had been working on a stablecoin bill for the past 20 months.
Rostin stated, "There is a lot of momentum and hope, and I believe members and leaders from both parties will strive for it, but getting legislation done within these few days will be very challenging."
A significant issue remains: which primary regulatory body will oversee stablecoin issuers—the federal government or state regulators? Last week, an aide to a Democratic representative said that there were attempts to include the bill in the upcoming Federal Aviation Administration legislation, but this seems unfeasible.
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Cointelegraph
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