Only the strong It will survive the wave of bankruptcies, layoffs and loss of volatility in the crypto sector.
Investors who have been burned by strong commitments or forced to sell digital assets in panic want evidence that companies have taken due diligence. Customers who buy, sell, borrow or lend crypto want to rest easy knowing their assets will not be lost. Prospective buyers, lenders, partners and employees require similar guarantees.
Crypto summer won’t last forever, but the table stakes for market entry have changed. Federal and state agencies are ramping up their enforcement efforts, lawmakers are coming up with new proposals and state agencies are enacting their own laws.
To take advantage of new opportunities and stay competitive as the seasons change, regulatory transparency will be key. Answering two key questions will help lay the groundwork.
Crypto summer won’t last forever, but the table stakes for market entry have changed.
Is my digital asset considered a security?
Chances are, your digital asset is one of two things: a security (that is, a financial instrument, like a stock or bond, that represents value) or a commodity (that is, an underlying commodity that can be exchanged for similar goods).
Currently, the Securities and Exchange Commission (SEC) considers every digital asset except Bitcoin and Ethereum to be a security. Although the Commodity and Futures Trading Commission (CFTC) and many others may agree — and the proposed bipartisan rule would put most digital assets under the CFTC’s jurisdiction — critics say the CFTC is ill-equipped to handle the workload and has less experience. The SEC, which doubled the size of its crypto assets and cyber division earlier this year.
