Blockchain is under government scrutiny around the world as regulators seek to detain fraudsters, limit their environmental impact, and protect investors and enthusiasts from the technology’s potential shortcomings. The European Union and the United States are currently leading the way in blockchain regulation, while other countries such as China have taken easier steps. Ban it completely.
However, this relatively new technology is tricky when it comes to regulation. Overly onerous restrictions can limit potential economic gains, and a laissez-faire approach can enable fraud, money laundering, and more. and how the EU is passing this needle with its current and developing blockchain regulations.
So far, the supervision of cryptocurrencies has mainly been base The Securities and Exchange Commission (SEC) interpretation and enforcement of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940 and the Investment Advisers Act of 1940. The issuer must register its market activity and disclose it to federal regulators in the same manner as any other investment under SEC supervision.
While the Joe Biden administration is considering further cryptocurrency regulation, the most pressing issue is clarifying whether cryptocurrencies should be defined as securities or commodities.Classifying them as securities would continue their current jurisdiction under the SEC, but the new Congressional bill would Change Put the crypto under the control of the Commodity Futures Trading Commission (CFTC) instead. However, both the SEC and CFTC leaders acknowledged that not all cryptocurrencies are the same and may require case-by-case analysis.
Bringing oversight of cryptocurrencies under CFTC control would be a game changer for industry players. look It is a more crypto-friendly regulator than the SEC and is more active in issuing new regulations. Nevertheless, if the CFTC obtains new powers to regulate cryptocurrencies, evaluation The SEC is much smaller than the SEC, so the new fees crypto industry players pay for enforcing new regulations.
The EU is paying attention to the environmental issues of blockchain.
The European Parliament’s Economic and Monetary Committee recently approved a cryptocurrency market regulation that requires crypto service providers to disclose their total energy consumption. While there is no specific mandate for cryptocurrency companies to reduce their carbon footprint, it is expected that these providers will voluntarily increase energy efficiency under public pressure.
This energy-focused regulation follows initiatives elsewhere in the world to restrict cryptocurrency mining due to environmental concerns. For example, China forbidden Overall Cryptocurrency Trading, and New York State passed it We launched a cryptocurrency mining moratorium and launched an investigation into the damage caused by proof of work (PoW) mining. Some cryptocurrencies, such as Ethereum, have already moved to Proof of Stake (PoS) methods to mitigate these damages.
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