Tony Kim
24 November 2024 at 15:48
Explore the latest regulatory updates impacting the world of cryptocurrencies, including SEC challenges, global developments, and significant legal action in November 2024.
As November 2024 comes to a close, the cryptocurrency landscape continues to navigate complex regulatory developments. according to a16z encoderSignificant legal and regulatory actions have shaped the industry, impacting various stakeholders globally.
SEC developments and legal challenges
The Securities and Exchange Commission (SEC) has been at the center of many pivotal decisions. Gary Gensler, the 33rd Chairman of the SEC, announced his resignation effective January 20, 2025. Meanwhile, a federal judge ruled that the SEC exceeded its authority by expanding the definition of “dealer” under the Securities Exchange Act of 1934, potentially To include decentralized finance (DeFi) participants. This ruling underscores the ongoing legal challenges the SEC faces in adapting its regulatory framework to the evolving cryptocurrency industry.
Additionally, the SEC's policy regarding digital assets has been challenged by eighteen Republican attorneys general. They argue that the agency's approach of treating secondary transactions as investment contracts violates the Administrative Procedure Act.
Commodity Futures Trading Commission and Consumer Financial Protection Bureau
The Commodity Futures Trading Commission (CFTC) has advanced recommendations for using distributed ledger technology to expand the use of non-cash collateral. Meanwhile, the Consumer Financial Protection Bureau (CFPB) has finalized a rule to expand oversight of non-bank digital payment providers, though excluding digital asset transactions.
Congressional Inquiries and Department of Justice Actions
Members of the US Congress have been active in voicing concerns and inquiries regarding cryptocurrency regulation. Rep. French Hill urged federal regulators to stop the ongoing rulemaking, while Rep. Sean Casten questioned the Treasury Department about the use of cryptocurrency mixers like Tornado Cash. Judicial proceedings were also announced, with the Department of Justice (DOJ) sentencing individuals linked to major cryptocurrency-related crimes, including the Bitfinex hack and operating illegal cryptocurrency mixers.
International regulatory developments
At the international level, various regulatory bodies have taken important steps. The Hong Kong Monetary Authority has issued warnings against unlicensed offshore cryptocurrency companies, while the UK's Financial Conduct Authority has secured convictions for individuals involved in cryptocurrency investment fraud. Furthermore, the Bank for International Settlements has explored the role of participants in decentralized exchanges through a new working paper.
State-level and other regulatory procedures
At the state level, California revoked BlockFi Lending LLC's financial license, reflecting strict regulatory scrutiny. Such actions highlight ongoing regulatory challenges and changes at the federal and state levels in the United States.
These developments illustrate the dynamic and often controversial relationship between regulators and the rapidly evolving cryptocurrency industry. As regulators and legal entities continue to adapt to technological advances, the cryptocurrency sector remains in a constant state of flux, with ongoing debates around jurisdiction, compliance, and innovation.
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