Kristin Smith, CEO of crypto industry group Blockchain Association is optimistic of crypto regulation this year.
She notes that crypto enforcement actions and settlements have been “behind closed doors” affairs.
Crypto regulation should be about the entire marketplace, not specific players or companies, she added in an interview with Bloomberg.
US regulators have in the past few weeks brought enforcement actions or reached major settlements with crypto companies, including Paxos, Kraken and Coinbase. Individuals have also been fined for their role in crypto-related schemes.
But Kristin Smith, the CEO of Blockchain Association, believes despite these actions, it is Congress that still needs to do the legislation and that the process should be as transparent as possible.
Crypto enforcement actions are “behind closed doors”
In an interview with Bloomberg, aired on Wednesday, Smith noted enforcement actions or guidance from the US Securities and Exchange Commission (SEC) and other regulators has picked up pace in recent days.
While the regulators have had to step in as proper legislation from lawmakers lags, Smith is critical of what she says in action and settlements that are taking place “behind closed doors.”
According to the Blockchain Association CEO, crypto needs proper regulation and the process of putting these into place has to be transparent.
“What we really need is a more open process where we look comprehensively at the entire marketplace, figure out the appropriate way to regulate, regulate different actors within it, within the crypto ecosystem, and move forward in an open process where everyone can participate.”
Congress has to tailor regulatory framework to crypto
Smith says Congress has been slow to formulate the needed regulatory framework and as regulators step in based on the same rules that apply to traditional assets, it is becoming more frustrating for crypto industry players.
More so, people in Washington, including crypto-friendly lawmakers who were keen on pushing for proper regulation, have been left a little “burned” and “betrayed” by what happened with the collapsed crypto exchange FTX.
Yet, she’s hopeful that the House Financial Services Committee’s move to form a special digital assets sub-committee is a great step towards getting the legislation done. But as legislation is a process, it cannot be expected that everything will be in place overnight.
According to her, the stablecoin market is likely to be the first area to get regulatory clarity in the US – particularly after the industry came close to bipartisan legislation in 2022.
“The work has been done there,” Smith explained, adding that Congress needs to come up with a regulatory framework tailored to crypto because the risks associated with this sector are not the same as those around traditional financial services. This has to be a priority, she said.
As noted earlier, US regulators have been overly aggressive, with actions against stablecoin issuers, staking service providers and crypto custody firms.
