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SEC Chair Gary Gensler grilled by senators



Former chairman of the Commodity Futures Trading Commission, Gary Gensler, testifies at a US Senate Banking Committee hearing on systemic risk and market oversight on Capitol Hill in Washington on May 22, 2012.

Jonathan Ernst | Reuters

WASHINGTON – Securities and Exchange Commission chairman Gary Gensler assured lawmakers Tuesday that Wall Street’s top regulator is working overtime to create a set of rules to oversee volatile cryptocurrency markets while balancing the interests of American innovators.

Gensler told the Senate Banking Committee that he and his team are trying to protect investors through better regulation of the thousands of new digital assets and coins, as well as oversight of the more familiar Bitcoin and Ether markets.

The SEC chief noted the enormity of the task and told Senator Catherine Cortez Masto, D-Nev. That the regulator could use “a lot more people” to evaluate the 6,000 novel digital “projects” and see if they are all classified as securities apply under US law.

“Right now we just don’t have enough investor protection in crypto financing, issuance, trading or lending,” Gensler said in prepared remarks. “In all fairness, it’s more like the Wild West or the old world of ‘buyer caution’ that existed before the securities laws were enacted right now.”

Still, some lawmakers urged Gensler to step up the pace, arguing that the opaque definitions and an uncertain market could not only lead to rampant speculation, but could stifle innovation.

Senator Pat Toomey, a Republican from Pennsylvania and the senior member of the committee, urged Gensler early on in the hearing whether stablecoins meet the definition of a security because investors don’t necessarily expect those assets to make a profit.

Stablecoins are a type of cryptocurrency that is pegged one-to-one to dollars or other traditional currencies and, as such, tend to be less volatile than their asset-class competitors.

“My only point is, I think we need clarity on this,” Toomey said. “I think you should publicly disclose this … and there is no way we should take enforcement action against anyone without first getting this clarity.”

But while Toomey and his Republican counterparts expressed concern about the SEC’s potential to stifle innovation without public guidance, Democrats tended to highlight speculative risk, which they see as rampant in the cryptocurrency market.

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Senator Mark Warner, D-Va., Jokingly criticized Gensler for calling only one “wild” in his description of the cryptocurrency industry as the “wild west” of financial regulation.

“As someone who shares some of your concerns about crypto, I will acknowledge that you are only putting one ‘Wild’ before ‘West’ as opposed to two,” he quipped. “As someone who has done quite well financially due to innovation, I’m fully involved. But we need guidance. We need direction.”

“I would go to the two ‘Wilds’ for describing this area, as good as some of the innovations are,” he added.

Controversial practice put to the test

Lawmakers also peppered Gensler with questions about the SEC’s ongoing analysis of payment for order flow, a controversial practice that online brokers like Robinhood Markets make money.

Firms like Robinhood sell their clients’ trades to market makers like Citadel Securities who execute the buy and sell orders. Market makers make profits by pocketing the difference between the price they buy shares in the open market and the price they get when they sell to Robinhood clients.

This means that market makers have an incentive to increase the price they offer to Robinhood’s clients. Given Citadel’s dominant market share, some regulators fear that investors may not get the best deal as online brokers themselves have an incentive to have rosy relationships with the companies that buy their trading volume.

“Britain, Canada and Australia have bans,” Gensler told reporters after the hearing. “We look at the entire market structure.”

The retail audience pays that “they don’t necessarily have an order-by-order competition,” Gensler told lowest price pledges.

Robinhood’s chief legal officer said Monday that he believes the SEC will ultimately “conclude that paying for the flow of orders is undoubtedly an amazingly good thing for retail investors and they will not ban it.”

Diversity and climate

Democrats and Republicans praised and blamed Gensler for the SEC’s move to approve Nasdaq’s rule to require diversity on the boards of companies listed with the exchange and for stepping up efforts to require corporate climate disclosure.

The Nasdaq’s new rule, which is expected to face legal challenges, is forcing company boards to comply with the gender and racial diversity requirements or to explain in writing why they did not.

Senator John Kennedy, a Republican from Louisiana.

Andrew Harrer | Bloomberg | Getty Images

The Nasdaq’s goal for most US companies is to have at least one female director in addition to one other board member who identifies himself as a member of a racial minority or the LGBTQ community.

Senator John Kennedy, R-La., Offered perhaps the most direct criticism of the SEC’s decision to endorse the Nasdaq administration.

“As for the people and the companies you regulate, do you consider yourself their father?” Kennedy asked Gensler. “Why do you impose your personal preferences on companies, and thus their customers and employees, with regard to cultural and social issues? Like climate change and the Second Amendment to the Constitution.”

“I’m sure you have personal feelings about abortion,” Kennedy continued. “Do you have any plans to impose these values ​​on companies?”

“I don’t think I am,” replied Gensler. “I think what I’ve been trying to say is when investors want information about climate risk … it’s our job at the SEC to notice and comment, do the economic analysis, and really see what investors are . ” Saying.”

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US Senator Calls On SEC Chairman To Provide Regulatory Clarity On Cryptocurrencies – Regulation Bitcoin News



A US senator has asked the chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, to provide clear guidance on cryptocurrency regulation. The Senator stated that in many enforcement actions, “the SEC has failed to identify the securities involved or the reasons for their status as securities, which would have provided much-needed public regulatory clarity.”

US Senator wants the SEC to provide clear guidelines on crypto regulation

Senator Pat Toomey, ranked member of the U.S. Senate Committee on Banking, Housing, and Urban Development, wrote a letter to SEC Chairman Gary Gensler on Friday regarding the regulation of cryptocurrencies.

His letter followed Gensler’s testimony before the Senate Banking Committee last week. Toomey began:

I’m writing to address the concerns I raised at the hearing about the need for regulatory clarity around emerging technologies such as cryptocurrencies, including stablecoins.

“In order for investors to benefit from a fair and competitive market, regulators must proactively provide rules on how to get to industry,” the Senator said that the SEC “has instead adopted a strategy of regulation through enforcement in this area.” To date, the commission has launched more than 75 enforcement actions against the crypto industry, fines and penalties totaling more than $ 2.5 billion against crypto companies and individuals.

At the Senate hearing, Gensler extolled “the SEC’s success in pursuing crypto-related enforcement measures.” Toomey noted, however, that “in many of these enforcement actions, the SEC failed to identify the securities involved or the reasons for their status as securities, which would have provided much-needed public regulatory clarity.”

SEC Commissioner Hester Peirce is also concerned about the SEC’s approach to crypto regulation. She criticized her own agency in August for taking an enforcement-oriented approach to crypto regulation.

The Senator from Pennsylvania noted that the SEC’s approach was tied to Gensler’s belief that “the likelihood is pretty slim” that a given cryptocurrency platform has no securities. For example, Gensler told Senator Elizabeth Warren at the hearing that the Nasdaq-listed crypto exchange Coinbase (Nasdaq: COIN) could have dozens of tokens, which could be securities.

Recently, Coinbase was forced to abandon its plan to launch a loan product after the SEC threatened legal action and the company alleged it had received no explanation from the regulator. In the meantime, the security guard is in an ongoing proceeding with Ripple Labs and its executives as to whether XRP is a security.

Senator Toomey emphasized:

The SEC has a responsibility to do more than just provide probabilistic estimates.

The Senator concluded his letter with a list of questions for Gensler to answer for additional guidance on crypto regulation.

What do you think of Senator Toomey asking SEC Chairman Gensler to provide clear guidance on crypto regulation? Let us know in the comment section below.

Photo credit: Shutterstock, Pixabay, Wiki Commons

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Crypto plunge a wake-up call — and tax opportunity — for investors



A detail of the statue of Satoshi Nakamoto, a presumed pseudonym of the inventor of Bitcoin, in Budapest, Hungary.

Janos Sorrow | Getty Images News | Getty Images

The price of popular cryptocurrencies like Bitcoin and Ethereum fell on Friday after Chinese officials stepped up crackdown and essentially ruled crypto illegal.

Government intervention, while substantial, does not necessarily mean that financial advisers believe investors should run into the mountains. But it’s another reminder that crypto holdings are subject to wild fluctuations in price, they said.

“I wouldn’t call this the end of the world,” said Leon LaBrecque, accountant and certified financial planner with Sequoia Financial Group, based in Akron, Ohio. “It’s just a wake-up call.”

“This should be in recognition of the fact that it is a volatile asset and that all the ups and downs are a match,” he said.

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This volatility opens up opportunities for tax planning that may only be a few months away, advisors said, depending on the Democrats’ final compromise on federal tax law.

Bitcoin prices had fallen 6% to around $ 42,000 at 3 p.m. ET Friday afternoon. Ether, the second largest digital currency, fell more than 8% to around $ 2,890.

The People’s Bank of China terrified investors after declaring all crypto-related activity illegal. These activities include, for example, trading services and foreign exchanges. This is the latest move in the country’s wider crackdown on digital currencies.

The ban on Bitcoin and other cryptocurrencies can be of concern for current and prospective investors as the government limits buyers for a significant segment of the world’s population, advisors said. And other governments are likely to have additional regulations as well, they said.

But these can’t make much of a difference in terms of long-term prices. A daily slump in crypto costs, which may feel significant at this point, is likely just part of a longer-term price correction towards an average price, advisors said.

“Will government regulation make cryptocurrencies volatile? Yes,” said Wayne Wilbanks, managing principal and chief investment officer at Wilbanks Smith & Thomas Asset Management in Norfolk, Virginia. “Will it make crypto redundant? No.

“I don’t think China’s regulation, or even US regulations, will make that much of a difference in the long run,” he added.

Bitcoin, for example, is still up around 40% year-over-year despite the slump on Friday. (It’s far from its April high of around $ 63,000, however.)

To this day, volatility is a signature of cryptocurrencies. This year, for example, prices have fluctuated sharply after tweets from Tesla co-founder and crypto enthusiast Elon Musk.

Advisors usually recommend that investors allocate a small portion of their portfolio (anything that they would lose entirely) because of the risk involved.

Tax advantage

Investors can take advantage of recent volatility, according to Jeffrey Levine, CFP, Accountant and Chief Planning Officer at Buckingham Wealth Partners in Long Island, New York.

Equity, crypto and other investors can “reap” investment losses for a tax advantage. Basically, you can sell a lost investment (e.g. Bitcoin) and use the loss to destroy the gain on a winning investment elsewhere in your portfolio.

This “tax loss harvesting” reduces (or eliminates) the capital gains tax owed on the estimated value of an investment sold.

However, unlike stock investors, crypto investors who are sold out can quickly buy back into the same or similar digital currency. As a result, if the volatile asset price recovers shortly thereafter, they can receive the above tax benefit as well as a portfolio benefit.

House Democrats proposed closing this crypto loophole after this year to reform tax law.

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A financial TikTok influencer with almost 500,000 followers says bitcoin is going to ‘get slayed’ – and shares how cryptos and stablecoins make up his trading strategy | Currency News | Financial and Business News



Mason Versluis

  • 21-year-old Mason Versluis has almost 500,000 followers on TikTok, where he gives tips on crypto and markets.
  • He recently spoke to Insider about how he chooses which coin to invest in and why.
  • Versluis said he would like to see bitcoin “slayed” as other coins have far more real-world use cases.
  • Sign up for our daily newsletter here, 10 things before the opening bell.

Bitcoin is the largest cryptocurrency by market value and is dwarfing its competitors for the time being. But the rise of crypto rivals with far more real world uses means it will be dethroned sooner rather than later, according to financial TikTok influencer Mason Versluis.

The 21-year-old Versluis also bears the username Crypto Mason and has almost 500,000 followers on his TikTok account, which he uses to shoot short videos to educate his viewers about crypto and the markets.

Versluis, who has been trading crypto since he was 15, recently spoke to Insider about his prospects for the market.

“The psychological thing that Bitcoin is always number one and king can be gone. By ‘kill Bitcoin’ I mean that I want something to happen and then we’ll see what happens afterwards, ”said Versluis.

Bitcoin has a market capitalization of just under $ 800 billion, according to CoinMarketCap, of the roughly $ 1.9 trillion that the entire crypto market is worth.

In the last 12 months it has gained almost 350% in price, but Versluis believes there is more value elsewhere.

“My dad told me about XRP when I was 17 and I’ve been back ever since,” he said.

“I’m one of those people who think XRP is a ‘better bitcoin’. And it actually solves the payment problem better than Bitcoin ever can or will, ”he added. Ripple Lab’s XRP token is used in fast payment systems – an area where Bitcoin can’t really compete given the comparatively slow network speed. One of the bigger crypto coins, XRP has kept pace with Bitcoin over the past year, rising 320%.

Ether, the native token of the Ethereum network, is the second largest cryptocurrency and accounts for around 20% of the market. The blockchain’s ability to run decentralized financial applications, smart contacts, and other protocols has resulted in an onslaught of investor money in ether this year, up nearly 800% over that time.

“It must have use cases, that is: Does this token do nothing? Am I only buying this token because I think it will increase in value?” said Versluis.

“That’s what I personally invest in, just because of the potential – they actually do something. Ethereum has so many decentralized applications built on it, ”he added.

When it comes to taking a position in a coin, Versluis says he’s not a day trader.

“It’s a lot of stress, you have to sit at the computer and watch the markets,” he said.

“I’m going to see an opportunity, put in some money and basically ramp up this rocket until I think it’s time to sell it. I sell them off and put them in a stablecoin like USDT or USDC. And then I just make profits and reinvest part of it in my main portfolio. So it’s a slow process, “he said.

As a relatively young trader who says that part of his passion for crypto is the decentralized, free nature, the question arises what Versluis thinks about the regulation in this market. Unlike many crypto fans, he’s not against it. However, he believes that all rules have to adapt to the reality of the crypto market and that one size does not fit everyone.

“It’s a digital world. And we’re only getting more digital and virtual, ”he said.

“You can’t just take the old system and the laws and slap it on crypto. It doesn’t work.

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