The recent U.S. Securities and Exchange Commission (SEC) lawsuits against Binance and Coinbase have created more urgency for U.S. lawmakers to come up with a comprehensive regulatory framework by this year, according to JPMorgan (JPM) in a Thursday research report. The SEC believes most cryptocurrencies should be classified as securities, and therefore, most crypto companies and trading should fall under its supervision and comply with regulatory frameworks that are currently applied to other securities. This lack of legal clarity is reflected in the SEC vs Ripple case.
The SEC’s stance could be more onerous and costly for the industry, but it would bring some positives such as proper regulation and more transparency and investor protection. Last week’s SEC actions have also created uncertainty about a number of other layer 1 tokens that are alleged to be securities, creating an advantage for Bitcoin (BTC) and Ether (ETH).
JPMorgan said that the need for U.S. lawmakers to come up with a comprehensive framework on how to regulate the crypto industries and the relative responsibilities of SEC vs the Commodity Futures Trading Commission (CFTC) is now more pressing than ever.