The president of crypto exchange FTX US outlined how his company is navigating the murky water of regulation, while arguing that the space needs greater clarity for digital asset listing.
Speaking in a recent interview with The Block, FTX US President Brett Harrison explained how his company is working through the regulatory landscape of crypto while arguing that the digital asset marketplace was in need of more clarity.
Harrison highlighted his exchange’s limited offering of cryptoassets, calling it their best option in light of current regulations:
We have fewer than 30 tokens on our exchange, and we think that’s fortunately or unfortunately the long term play that will work for us until there is better clarity in terms of what registration is going to be required.
Harrison continued, saying that it was his belief that many more crypto projects would be willing to register with the U.S. Securities and Exchange Commission (SEC), and thereby be available for listing, if a clearer regulatory framework was provided. He noted that many of these projects want to be listed on US-based crypto exchanges, but are currently barred from doing so due to the lack of clear guidelines.
According to Harrison, many crypto companies are being deterred from operating in the US due to fears of “enforcement action down the road.” He claimed that they would prefer for their tokens to have “security like properties,” and argued that the US should do more to provide regulatory clarity.
Harrison’s interview came in the wake of comments made by SEC Chair Gary Gensler, claiming that many crypto exchanges and broker-dealers were still in violation of guidelines set forth by the regulatory body.
On September 15, the day that Ethereum completed its Merge upgrade, Michael Saylor, Co-Founder and Executive Chairman of business intelligence software company MicroStrategy Inc. (NASDAQ: MSTR), implied that $ETH could get classified as a security (rather than a commodity) by the SEC.
Saylor, who is a Bitcoin maxi (i.e. believes that — with the exception of fiat-backed stablecoins such as Tether ($USDT) — Bitcoin is the only legitimate cryptocurrency), sent out a tweet in response to comments by Gensler’s most recent comment on PoS cryptocurrencies that suggested he expects the SEC to eventually declare that $ETH is a security (unlike $BTC which they have publicly called a commodity and therefore not subject to U.S. securities laws).
The Wall Street Journal (WSJ) report that Saylor was referring to in his tweet says that “Ethereum’s big software update on Thursday may have turned the second-largest cryptocurrency into a security” in the eyes of the SEC. According to the WSJ report, although Gensler did not specifically mention Ethereum, he said yesterday that the native assets of PoS blockchains could pass the Howey Test since it was possible to view staking as an “investment contract” because “the investing public is anticipating profits based on the efforts of others.”
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