Regulatory Series on Cryptocurrencies – US SEC and ESMA to give more clarity

Amid the crypto-market downturn which began especially after the news of the US Securities and Exchange Commission’s (SEC) declining the decision on an ETF product approval, The SEC’s standpoint on Bitcoin ETF’s seems to constructive for crypto-aspirants, as the SEC Commissioner Hester Peirce, who is also known as ‘Crypto Mom’, revealed that it is unlikely to rule out a bitcoin ETF approval.

On the back of this, for the first time since August, there are multiple bitcoin exchange-traded fund (ETF) proposals piling-up before the U.S. Securities and Exchange Commission (SEC).

For now, Jay Clayton, the SEC chairman gives better clarity on the status of cryptocurrencies concerning whether they are securities or not. Clayton stated that a cryptocurrency perceived to be a security, now to be considered as a commodity if it becomes substantially decentralized.

On the flip side, the European Securities and Markets Authority (ESMA) chairman, Steven Maijoor also proposed further regulation in order to ensure safeguard for the investors.

The European regulatory authority seems to be taking precautionary steps as they intend to mitigate risks for the consumers.

As per Steven Maijoor’s standpoint, where crypto-assets are not to be categorized as financial instruments, the cause of concern is that the absence of applicable financial rules leaves consumers exposed to potential risks.

Clayton also appears to be of a similar opinion by appending his agreements to – “the director Hinman’s perception on the treatments of digital asset transaction. Just in case as to how a crypto-asset transaction no longer represents an investment contract, buyers would no longer reasonably expect a person or group to carry out the essential managerial or entrepreneurial efforts. Under such circumstances, the digital asset may not represent an investment contract under the Howey framework that defines the elements of investment contract should consist investment of money, a common enterprise, expectations of profits and entrepreneurial or managerial efforts of the third party.”

Overall, from the US SEC to ESMA are very meticulous and prudent in devising stringent but conducive regulatory frameworks to the cryptocurrency exchanges to ICOs. Amid all these developments, BTCUSD surpassed a psychological $4k mark with slight upside price traction.

Currency Strength Index: FxWirePro's hourly BTC spot index is flashing at 29 levels (which is mildly bullish), while hourly USD spot index was at -96 (bearish) while articulating at (06:36 GMT).

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