JP Morgan, one of the leading US banks with a market capitalization of $413 billion, has taken a firm stance in support of the crypto industry, urging the US government to establish dedicated regulations.
The recent legal actions taken by the Securities and Exchange Commission (SEC) against cryptocurrency exchanges have raised concerns about the potential flight of crypto capital from the US market.
Following the SEC’s scrutiny of prominent exchanges like Binance and Coinbase, JP Morgan highlights the immediate necessity to develop a legislative framework for the crypto industry.
The classification of cryptocurrencies as “securities” by the federal commission creates operational complications for major high-capitalization cryptocurrencies listed on US exchanges.
Several crypto exchanges and service providers have already withdrawn from the US market due to the fear of legal repercussions.
JP Morgan’s research report emphasizes the importance of protecting the US crypto market from capital outflow and suggests that a regulatory framework is essential for achieving this goal.
While smaller competitors have struggled against the SEC’s charges, major players like Binance and Coinbase have actively defended themselves in court.
Recent court decisions have favored the crypto industry, rejecting requests to freeze assets and demanding regulatory clarity within a specified timeframe.
In contrast to JP Morgan’s call for regulation, the SEC seems determined to hinder the formulation of dedicated regulations for the crypto industry. Instead, the commission relies on outdated laws and legal channels to impede the industry’s progress.
Critics argue that the SEC’s actions are strategically aimed at slowing down the advancement of cryptocurrencies, potentially to facilitate the introduction of central bank digital currencies (CBDCs).
Amidst growing opposition, some lawmakers, including US Representatives Warren Davidson and Tom Emmer, have submitted the “SEC Stabilization ACT” to the House.
The act calls for the dismissal of SEC Chairman Gary Gensler and comprehensive reform of the agency. Supporters of the bill claim that Gensler’s actions and alleged regulatory inconsistencies demonstrate a need for change.
The proposed reforms aim to prevent any party from holding a majority on the commission and introduce the position of executive director, separating politics from regulation.