• Congress may separate crypto exchange and custody the same way it separated Wall Street and commercial banking.
• Rep. French Hill is the chair of the Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion.
• Clarity on which agency, the SEC or the CFTC, will seek explicit oversight is what the Subcommittee is sorting through.
The crypto industry may soon be impacted by a regulation change that has been nearly a century in the making. Congress is considering separating crypto exchange and custody the same way it separated Wall Street and commercial banking. This potential regulation change is being looked at by the Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion and its chair, Rep. French Hill.
The Subcommittee is currently sorting through the specifics of which agency, the SEC or the CFTC, will seek explicit oversight. Rep. Hill has said that the Subcommittee is trying to “sort through” the proposed regulation change and its implications. If the regulation change is enacted, it could have a major impact on the crypto industry and how people use cryptocurrencies.
The regulation change is an attempt to provide more protection for investors by separating custody from exchange. Currently, many exchanges are both custodians and market makers, meaning that they are responsible for both the storage and trading of crypto assets. By separating the two, investors would be better protected from potential losses due to mismanagement or theft.
The crypto industry has seen its share of scams and hacks in recent years, and this regulation change could provide much needed clarity and security. It could also open up the market to more institutional investors who may have been wary of investing in the space due to potential risk.
The regulation change is still in the early stages of discussion, and it may be some time before it is enacted. But it is a step in the right direction for providing more clarity and protection for investors in the crypto space. As more details emerge, the industry will be watching to see if the proposed regulation change will be a boon or a burden.