Regulatory Clash: US Industry Watchdogs Lock Horns Over Proposed Crypto Market Structure Bill

Opposition has arisen within the United States as industry watchdogs come together to express their disapproval of a draft bill regarding the crypto market structure. The proposed legislation, known as the Digital Asset Market Structure Discussion Draft bill, has faced criticism from groups such as Americans for Financial Reform and the Center for Responsible Lending.

According to the watchdogs, stakeholders in the crypto industry have actively supported the committee’s draft proposal, without providing substantial evidence of practical use cases beyond speculative investment. The groups argue that the crypto market is attempting to push for favorable legislation under the guise of promoting innovation.

One particular provision of concern in the draft bill is its potential impact on the evaluation of regulatory rulemaking by the U.S. Securities and Exchange Commission (SEC). The proposed provision would require the SEC to assess new rules based on the criterion of “innovation.” Critics argue that this could lead to a regulatory framework that prioritizes innovation over consumer protection.

The aim of the comprehensive digital asset bill is to establish a clear regulatory framework for the crypto industry in the United States. Representative Patrick McHenry, the chair of the House Financial Services Committee, has scheduled a committee vote for July 2023. The draft bill focuses on the involvement of the SEC in overseeing the regulatory framework.

In June 2023, the SEC took legal action against two major crypto exchanges, Coinbase and Binance, known for their significant trading volumes. However, the impact on the crypto market was minimal, as traders largely shrugged off the news.

In contrast to the calls for stricter regulations, the industry watchdogs argue that Congress should support the ongoing enforcement actions taken by the SEC to protect consumers. Meanwhile, other jurisdictions in Europe and Asia are actively working to attract crypto businesses that may consider relocating away from the United States.

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