05/14 update below. This post was originally published on May 12
BitcoinBTC, Ethereum, and other major cryptocurrencies have been grappling this year with a US cryptocurrency crackdown that some believe could “destroy all bitcoin value.”
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Bitcoin surged through the first few months of 2023 but is still far from all-time highs in late 2021, as traders hail the “new market order.” Meanwhile, the fate of Ethereum and other cryptocurrencies hangs in the balance as US regulators struggle to control the market.
Now, a leaked memo circulated to members of the House Democratic House Financial Services Committee revealed the “key messages” that lawmakers have been asked to adhere to that would see almost all cryptocurrencies classified as securities.
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The document, which was passed to committee members by the Democratic Party ahead of Wednesday’s House joint hearing on encryption policy, was leaked by Fox Business Correspondent Eleanor Teret on Twitter. “The problem is not ambiguity – it is a collective non-compliance with existing laws,” the note says. “We cannot invent new convenient regulatory structures just because crypto companies refuse to follow clear rules of the road.”
The memo calls on Democratic lawmakers to walk back Republican claims “they are working to bring clarity to markets by creating space for the CFTC in cryptocurrencies”… “Republicans are proving they aren’t really serious about protecting investors and consumers.” “
Bitcoin, Ethereum, and cryptocurrency have become a partisan issue over the past year, with prominent Republicans like Ted Cruz lent their support to cryptocurrency and influential former presidential candidate Elizabeth Warren embracing the idea that she is “building an anti-crypto army.”
Update 05/14: This week, lawmakers reintroduced a bipartisan bill from 2022 to Congress that would require US federal agencies to report on El Salvador’s cybersecurity capabilities and financial stability as part of efforts to combat the use of cryptocurrency as legal tender, alleging that Bitcoin can “weaken economic and financial stability and enable malicious actors.”
El Salvador has become the first country in the world to legally tender bitcoin in 2021, with the country’s president Neb Bukele buying nearly 2,400 bitcoins as part of a plan to make bitcoin a core part of the country’s economy.
“Given the United States’ interest in prosperity and transparency in Central America, we must seek greater clarity on how the adoption of bitcoin as legal currency will affect El Salvador’s financial and economic stability, as well as El Salvador’s ability to effectively combat money laundering and illicit financing,” Jim Risch , Republican from Idaho announced the legislation, Tell the Washington Examiner.
“Never in my wildest dreams would I have thought that the government of the United States would be so afraid of what we do here,” to publish to Twitter last year when the bill was first introduced.
US President Joe Biden issued an executive order last year directing federal agencies to investigate how to respond to the bitcoin, ethereum, and cryptocurrency boom.
Under the chairmanship of Gary Gensler, the US Securities and Exchange Commission (SEC) has claimed that it has power over the cryptocurrency market and has suggested that it views all cryptocurrencies other than bitcoin as unregistered securities.
“Both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) agree that the SEC is the regulator for determining whether crypto assets are securities,” the memo reads. The Securities and Exchange Commission (SEC) declared that almost all crypto assets are securities, adding: “End of story. “
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Gensler, who has drawn criticism from the cryptocurrency community for his “regulation through enforcement” approach, has repeatedly asked Congress for more resources to better monitor the cryptocurrency market.
“Republicans want to reverse course and tie the SEC’s hands,” the memo said. “The SEC must continue to lead in regulating the cryptocurrency market in the United States, and Congress must do its part to provide them with the resources they need.”
The bitcoin, ethereum, and cryptocurrency industry has widely criticized the note.
“It is strange that they put something so blatantly illegal in writing,” Ari Paul, chief investment officer at BlockTower Capital, said. to publish to Twitter. “The SEC has no authority to determine what is and is not a security under the law. For them to do so would be to violate the laws governing their operations.”
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