Impact of forthcoming SEC regulations

[decenken88]

Greetings,

Any thoughts on the potential impact of incoming government regulations on the crypto market? I'm curious to see how others envision the SEC defining which projects are sufficiently centralized enough to be considered securities. What metrics could be used in this 'test' that Gary Gensler recently alluded to to make such a determination?  How devastating a blow could these regulations potentially have on the marketplace? Given the highly decentralized nature of Bitcoin relative to other cryptocurrencies, should I even be concerned about BTC being affected at all? Does anyone see danger for other well established projects like Cardano or Ethereum?

Thanks in advance for any opinions/insights

 

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[franky1]

once the first ETF has been approved. that becomes the template of success which all other companies follow. they follow the application wording and the policy books the company has to ensure other companies get swift approval also

with each new company getting approved those companies will be buying 'baskets' of bitcoin. and i mean thousands of btc.
this part will affect the markets. as it will be large buy-ups.
alot of companies have not yet bought large amounts of bitcoin because they are unsure if they will be an etf and they cant just be spending money if they cant be sure they can offer a service. so there will be a buy-rally once the ETF's get accepted.

as for the regulations. well its the same as any fiat regulation.
those customers buying into the ETF shares are not actually going to be touching bitcoin. but shares of company collateral storing bitcoin. so all fiat rules apply.
the company will have to be audited regularly to ensure they have the collateral at all times. which is pretty simple. display public address of hoard.

as for the market reaction after the buy-rally. well the ETF share price wont impact the btc market price. . however the expand collateral seasons. where ETF companies get so much customers they need to buy more btc to cover more share offerings. that will affect bitcoins market price.

regulatory wise. well thats just going to affect the businesses that are classed as MSB's anyway. great for the big guys that do this stuff anyway.. not so great for any little guys just trying to start-up from the beginning

[decenken88]

Really appreciate the insight. How close do you think we are to approval for crypto ETFs? Some of the brass at SEC seem loath to the idea at the moment.  Why are they dragging their feet? Do you view it as a forgone conclusion that these ETFs will be approved?

[franky1]

many ETF applications over the years that reach their deadline and not get approved.
i think that SEC is waiting for senate/congress/house to pass some laws that will give the SEC more powers to audit and sanction MSB's in regards to their crypto custodianships. so the SEC wont approve anything until they have extra powers.

at the moment they only have powers to audit and sanction over fiat values(and traditional assets/securities).
the big infrastructure bill has bits in it that will give the SEC more powers over MSB's handling crypto. so it might be enough to sway the SEC to finally approve an ETF

the big crypto exchanges love and support the bits in the infrastructure bill about crypto. as it helps them monopolise the exchanges due to all the licence and compliance costs which little businesses cant afford

no one can tell when the SEC will accept an ETF. because the SEC is not very clear on the details they want to see. which is why those applying for an ETF havnt yet made any convincing applications thus far
(EG even without law an applicant can write a policy/contract with the SEC to do more than minimum KYC/AML stuff beyond the norm and accept to pay a fine if breaching it. yet even over promising their own policy plans. the SEC still has not approved any or thought any were worthy enough)

[Tash]

If you tell the world what it is, what a regulator ought to do
https://twitter.com/i/status/1423082183195983874