The United States may be poised for a resurgence in the cryptocurrency sector, as recent court rulings appear to be reining in the Securities and Exchange Commission (SEC), according to a digital asset attorney from K&L Gates.
Jeremy McLaughlin, a partner at the international law firm, highlighted the trend during his participation in the Intersekt23 conference in Melbourne on August 31.
McLaughlin noted that a series of U.S. court cases have challenged SEC Chair Gary Gensler’s stance that nearly all digital assets should be classified as securities.
He explained that while initial crypto regulations were primarily established at the state level and relatively straightforward, the involvement of federal bodies like the SEC and the Commodity Futures Trading Commission led to increased market restrictions.
The attorney pointed out that due to the SEC’s aggressive approach, many tokens were delisted, and some companies even exited the U.S. market.
However, recent court decisions have begun to curtail the SEC’s assertiveness, rekindling optimism within the industry.
Recent examples of the SEC facing setbacks include its loss in a lawsuit brought by a crypto firm and a separate case where a crypto firm prevailed against the SEC.
A noteworthy instance occurred on August 29 when a U.S. District Court judge ruled against the SEC’s denial of Grayscale Investments’ application to convert its flagship Bitcoin fund into an exchange-traded fund.
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Similarly, a judge ruled in July that Ripple Labs’ XRP was not a security when sold to retail traders, leading to a partial loss for the SEC.
Despite these developments, McLaughlin acknowledged the challenges of providing legal advice in such a rapidly evolving landscape and lamented the lack of clear guidance for clients.
However, he expressed optimism that the chaos in crypto regulation was subsiding as court decisions increasingly favored the digital asset industry.
Regarding Australia’s crypto legislation, panelists at the conference discussed its comparative state.
Effie Dimitropoulos, Chief of payment services firm Novatti, described Australia’s regulations as “lagging” in comparison to new frameworks in Hong Kong and the European Union.
She highlighted the uncertainty faced by local crypto businesses due to the evolving legal landscape, resulting in the potential obsolescence of legal advice.
Dimitropoulos further emphasized the need for clear resolutions from regulatory bodies such as the Australian Securities and Investments Commission and the Treasurer to alleviate the ongoing uncertainty.
In conclusion, the U.S. crypto industry is showing signs of renewal as court rulings moderate the SEC’s regulatory zeal, while Australia’s crypto regulations are criticized for falling behind international standards.
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