Why we need to reject SEC regulations on Exchanges

March 8, 2018 /u/lamb0x 0

I am not against all forms of regulation, what CFTC is going is pretty outstanding, they are educating investors and are helping in weeding out scams from the scene.

But SEC is poking its nose where it doesnt belong and trying to turn crypto into something it is not. If you read the latest “Exchange regulation” primer, the SEC wants all exchanges to be registered as a “national securities exchange”, registered as a broker-dealer and filed a Form ATS with the SEC, register with FINRA’s BrokerCheck, et cetera…

Except registering will all these institutions costs millions of dollars. Its not a lot of money for Poloniex or Binance but for a new exchanges, this severely restricts their growth. The “SEC registered exchange” business will become similar to the stock market game where only the already established exchanges will be able to sell their shovels.

Essentially, the SEC’s stand is that all ICOs based coins/tokens are securities, and when it comes to new securities offering in the traditional stock market, there are massive capital restrictions on who can invest in these IPOs – such as allowing only high net worth individuals and registered funds access to invest in these markets.

All these regulations will eventually translate into much higher KYC norms for end users and it is not unreasonable to think entry restrictions will be placed on most retail users. You may be asked to link social security details or obtain a crypto traders license. Exchanges will be asked to file regular reports on users with high volume, so you can be monitored closely. Unless you are trading hundreds of thousands, you may even be priced out of these “regulated crypto exchanges”.

The SEC needs to get over it, crypto is not a security and they have no business spreading their bullshit here. Crypto helps in making financial trading instruments much more accessible to the average citizen, not the opposite. In any case over regulating this market is going to end badly, the SEC has little to no control over decentralised exchanges and many of these will sprout up (of course some of them will be even scams) and people will continue to lose money despite all these regulations, thus resulting in more regulations.

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