For too long, the United States has been left behind the rest of the world in rethinking policy. Now, in just the first 30 days of the Trump administration, the rethink has been mentioned in the hearings of the Congress, which appears as a priority by the newly created Crypto task force of the SEC and today is the focus of a bipartisan letter of the legislators who challenge the position of the previous SEC. On its inclusion in bags listed in the stock market (ETPs). Many in the digital asset sector celebrated when the first ETF spot ETFs were approved in September last year. It was a giant leap forward for the second largest cryptocurrency, achieving legitimacy in the eyes of US regulators. But there has been an obvious omission within these financial products: the ability to bet the assets and profits maintained in doing so.
Now a bipartisan group of legislators, including senators Cynthia Lummis (R-WY), Kirsten Gillibrand (D-NY), Steve Daines (R-Montana), Bill Hagerty (R-Ten.), Thom Tillis (R-C) , Bernie Moreno (R-Ohio) and Ron Wyden (D-OR) are leading the way To correct that. In a letter delivered to the stock and values commission on Friday, they are challenging the SEC directive to exclude the participation of the ETP protocol, highlighting how this position could undermine both the protections of investors and the competitiveness of US markets.
The prohibition of the SEC on the rethinking within the ETPs is based on a defective understanding of how the rethinking in the stake test networks such as Ethereum works. Bet is not an investment product itself. Rather, it is a fundamental technical requirement to ensure and validate transactions in stake test networks. When tokens holders put their assets, they contribute to network security and, in doing so, they obtain rewards generated by the protocol itself, not any centralized authority.
International competitiveness
The SEC Directive to detect ETP ETTR emitters to exclude the replant raises serious concerns about the competitive position of the United States in the global digital asset markets. While the United States doubts, other important financial centers, including Switzerland, Canada, Germany and Australia, have adopted the rethinking in their ETP of digital assets, recognizing their integral role in the safety of networks and operational stability. Last month, the United Kingdom issued a legal instrument that acknowledges that agreements to qualify the stain of cryptographic assets do not equal a collective investment scheme, which reinforces its importance to ensure and maintain blockchain networks.
Because the rethinking is essential to ensure stake test networks, it also means that if there were no one betting their ether, then all the assets within these ETPs would be at risk. This means that, perversely, the SEC has forced US investors to a position in which their investments are only protected by assets held in other jurisdictions.
Crucially, the impact of these regulations extends beyond the Ethereum block chain, but applies to future ETPs of other networks that also use a Swindm Proof, Avalanche and Polkadot. As the digital asset sector grows, the impact of this wrong regulation will only be deepened.
Obtaining this regulation is bad to both US investors and the economy of the United States. Or investors accept national products without rethinking and the associated rewards, limiting their financial yields, or seek exposure through alternatives on the high seas, promoting capital on the high seas and outside the stock exchanges of the United States. Without the rethinking, the ETP ETP holders gradually lose their relative position of the network owned due to the inflationary nature of the rethinking rewards.
This economic reality makes us less competitive and less attractive products for investors seeking comprehensive exposure to the Ethereum ecosystem. Even more worrying, this result seems to contradict the central mission of the protection of SEC investors, which probably pushes investors towards investment vehicles in other jurisdictions that may not comply with the protection standards of investors available for Investors in the United States.
The technical risks associated with the rethinking, when administered by sophisticated validators, are minimal and well understood. The “cutting risk” often cited, a penalty mechanism for attempts for dishonest validation, has affected only 0.001 percent of the ether is to date. These data suggest that the cautious posture of the sec can be disproportionate to the real risks involved.
What is at stake?
While we expect the SEC’s answer to the important questions raised by Congress, US investors continue to be a different disadvantage. The forward path requires a balanced approach that recognizes the participation of what it is, a technical mechanism for network safety, while guaranteeing that there is adequate supervision when offered within regulated investment products.
As the letter indicates correctly, while only Congress can create a comprehensive regulatory framework, the SEC has the authority to allow participation in ETP. Doing doing would align both with the agency’s mandate to protect investors and with the aim of maintaining US leadership in global financial markets.
The bipartisan letter of the Congress to the commissioners of the Sec Uyeda and Peirce that support the protocol for the participation in ETP of digital assets is a significant milestone for investors, both native and institutional. Give The most common sense issues in the panorama of digital assets.
It is beyond the time for the SC to assume a leadership position when it comes to the protocol reference, which drives the digital asset sector. This corresponds to the aspirations of the American economy and the Americans who trust it.
