Only the strong Survive the avalanche of bankruptcies, layoffs and volatility now cascading through the crypto sector.
Companies need evidence of proper licensing and due diligence if investors are lulled by shoddy promises or forced to sell digital assets in panic. Customers who buy, sell, borrow or borrow crypto want to rest easy knowing they won’t lose their assets. Prospective buyers, lenders, partners and employees demand similar guarantees.
Crypto winter won’t last forever, but the table stakes for market entry have turned. Federal and state agencies are ramping up their enforcement efforts, legislators are pushing new proposals, and state agencies are setting their own rules.
To capture new opportunities and stay competitive as the seasons change, regulatory clarity is critical. Answering two key questions will help lay the groundwork.
Crypto winter won’t last forever, but the table stakes for market entry have turned.
Is my digital asset considered a security?
Chances are, your digital asset is one of two things: a security (that is, a financial instrument like a stock or bond that represents a value) or a commodity (that is, a basic commodity that can be exchanged for similar goods).
Currently, the Securities & Exchange Commission (SEC) considers every digital asset besides Bitcoin and Ethereum to be a mandatory security. While the Commodities and Futures Trade Commission (CFTC) and many others disagree — and the proposed bipartisan legislation would effectively put most digital assets under the CFTC’s jurisdiction — critics say the CFTC is ill-equipped and under-experienced to handle the workload. The SEC nearly doubled the size of its crypto assets and cyber unit earlier this year.