A memo leaked to the media in recent days suggests the Democratic Party is siding with the Securities and Exchange Commission (SEC) in its battle with the crypto industry. Right down to issues such as funding for regulators and the classification of cryptocurrencies for legal purposes.
A leaked memo on crypto regulation could spell the end of the United States as a leader in the crypto sphere. The memo was initially leaked by a Fox Business reporter, Eleanor Terrett, on Twitter. Terrett detailed its contents in a May 10 tweet that quickly gained hundreds of retweets and thousands of likes. The memo affirms what many have long suspected about crypto’s relative popularity among the two major US political parties.
A Leaked Memo Meant for One Party
The memo’s ostensible readership was congressional Democrats sitting on the House Financial Services Committee. It includes “key messages” for representatives to draw on when engaging with the issue of crypto.
“The problem isn’t ambiguity,” reads one part. “It’s mass non-compliance with existing laws, and crypto companies can’t be let off the hook. The US has a regulatory system that has worked well and sustained massive innovation in the financial system for decades. We can’t invent new accommodating regulatory structures simply because crypto companies refuse to follow clear rules of the road.”
The crypto industry has almost universally taken the view that digital assets do not fit neatly within existing regulations. As such, new, bespoke laws should be written. Republicans have generally been more sympathetic to that view.
Democrats Are Officially Anti-Crypto
The memo appears to underscore partisan divisions among those charged with financial regulation. It suggests that crypto will become an even more partisan issue.
The document instructs Democrats in Congress to attack Republicans on multiple fronts. Including, on hammering them on the funding of the Commodity Futures Trading Commission, and backing Gary Gensler’s classification of “nearly” all crypto assets as securities.
Gary Gensler is the current chair of the SEC, and has developed an adversarial relationship with the industry.
Another bullet point in the memo reads:
“Both the SEC and CTFC are aligned on the fact that the SEC is the regulator to determine if crypto assets are securities. And the SEC has made clear that nearly all crypto assets are securities. End of story.”
Yet another bullet point encourages Democrats on the committee to praise Gensler for building the “strongest enforcement team yet.” Gensler and the SEC “must continue to lead the regulation of the U.S crypto market.”
Clearly, the Democratic Party has long been the more crypto-skeptic of the two big parties in the United States. Progressive senator Elizabeth Warren, in particular, has repeatedly called on regulators to be tougher with the industry.
If the leaked memo is any indication, more of her party colleagues will be joining her.
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