Cryptocurrency News

SEC’s Digital Asset Expert Believes Crypto Spring is Coming

March 26, 2019
Saad Mohammad


SEC’s Digital Asset Expert Believes Crypto Spring is Coming

A digital asset expert at the U.S. Securities and Exchange Commission (SEC) is of the view that the cryptocurrency market will overcome the current bear market and regulating digital assets now would help boost it in the long run.

Regulating cryptos would boost the market

Valerie Szczepanik, the SEC’s senior advisor for digital assets, stated that for the cryptocurrency community to experience a crypto spring, they must learn to work with regulators. She made this remark while addressing attendees at the SXSW event in Texas on Friday, March 15. She believes that the bear market is near its end.

Szczepanik, during a Q&A session with attorney Daniel Kahan of Morrison & Foerster LLP, explained how the regulatory methods adopted by the commission would allow innovation to prosper, though new kinds of businesses would not be provided with clear guidance at the beginning. She noted that the lack of complete guidance allows the SEC to be more flexible when dealing with emerging markets.

The digital asset expert pointed out that she understands the need for entrepreneurs to ascertain if they can run a business while complying to current securities laws or not, but argued that the principles-based approach implemented by the agency makes it possible for more opportunities to spring up from crypto and blockchain tech.

“I think if you were to propose a new regime of regulations precipitously without really studying it, you might end up steering the technology one way or another,” she told the attendees.

When quizzed about stablecoins, the SEC senior advisor revealed that they currently have several arrangements that enable the coins to maintain their stable price and avoid volatility, unlike the other cryptocurrencies.

She specifically talked about stablecoins that create two assets, one designed with a fixed price while the value of the second one fluctuates to aid the first one to retain its stable price. Talking about that class of stablecoins, she stated that they might be getting closer to security.

SEC penalties

Szczepanik continuously emphasized the need for companies to engage in dialogues with SEC as it would help both the commission and the crypto market if they work together. She discussed SEC’s FinHub, where businesses and organizations talk with their staff regarding the approaches they are taking. Szczepanik maintained that holding dialogue with the commission would always result in better outcomes for the companies.

The SEC executive noted that regulatory action taken action companies would reduce if they indulge in working better with the regulators at each point in time. She encouraged crypto companies to keep their businesses in the US as the opportunities available to them are limitless as long as they can follow the regulations put in place by the different regulatory bodies.

Szczepanik revealed that regulatory efforts regarding crypto and blockchain technology are not an isolated matter. Regulators all over the world are in contact with each other regarding the best way to address this new technology. She believes that there is a lot of excitement around the world regarding the technology and how it can be deployed to boost efficiency and reduce cost in virtually all sectors of the global economy.

The fundamental message by Szczepanik was that crypto companies would experience better outcomes if they interact with the SEC and other regulatory agencies. To encourage them to do so, she is aiming to give more entrepreneurs the opportunity to contact and discuss their concerns.

The comments by Szczepanik indicates that the SEC could be looking to interact more with crypto entrepreneurs and find the best ways to regulate the emerging market. If that is the case, then the US crypto space could see more favorable laws come into legislation over the coming months.