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Who is responsible for regulating the American crypto industry for children?

In a recent interview with Bloomberg, US Exchange Commissioner Hester Peirce spoke about the heated regulatory environment in the country. Peirce, affectionately known as “Crypto Mom,” said the crypto market is in its early stages.

“I think my child is still a toddler.”

However, she argued that she was “much more of a free-roaming mother” than SEC chairman Gary Gensler.

In the context of the introduction of a new regulator to monitor digital assets, she said:

“Personally, I don’t think that’s necessary.”

At the beginning of October, Coinbase proposed a number of regulatory guidelines as part of its Digital Asset Policy Proposal (dApp). One of the recommendations was the need for a “single regulator”. It had argued that it would “avoid fragmented and inconsistent regulatory oversight”.

On the contrary, Peirce argued against it in the interview. She explained

“We have such a fragmented regulatory system for financial products and services in general that I don’t know if adding another regulator would be my top priority.”

Recently, the US PWG published a regulatory report on stablecoins that expanded the powers of the SEC and CFTC. It had said that maintaining market integrity and investor protection is the responsibility of the SEC and the Commodity Futures Trading Commission (CFTC).

However, the SEC commissioner also agreed that boss Gensler is also a “big believer” in having a “federal financial supervisory authority for the crypto markets”.

However, Peirce fears that Congress will not have enough time to build a regulatory framework on it. She noted

“Congress has a lot on its agenda … We could do some of this on our own. But here, too, there are some questions of jurisdiction. “

Not long ago, the acting chairman of the CFTC, Behnam, asked Congress for more powers to regulate the crypto market. In this regard, Crypto Mom noted,

“CFTC may have a different understanding of jurisdiction than we do.”

Therefore, Peirce suggests using the experience of existing supervisory authorities for “mixed” supervision. She said,

“The SEC has experience regulating retail markets. The CFTC has experience in the regulation of futures markets. And then the banking supervisory authorities obviously have experience. “(Sic)

What will happen to DeFi?

In the interaction, Peirce argued that the “decentralized, smart contract-based financial transactions have a built-in regulator”. So she pushed for regulations that recognized the “unique aspects of this technology”.

Recently, the global Watchdog Financial Action Task Force (FATF) also released its latest guidance on cryptocurrencies. In the context of DeFi, Rick McDonell, former FATF Executive Secretary, told CNBC:

“The lack of effective surveillance creates a significant risk of fraud, money laundering, sanctions evasion and other criminal activity in these markets.”

That said, Gensler had vowed in the past to bring DeFi under its regulatory umbrella. After DeFi targets stablecoins, it will likely get under the oversight radar soon.

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