Regulatory oversight of leading exchanges like Binance and Coinbase has raised concerns among the markets.
However, JPMorgan has seen a glimmer of light, suggesting that these actions could ultimately benefit the crypto markets.
According to a recent research report by JPMorgan, the crypto industry is likely to see better regulatory measures. The banking giant emphasized that the lawsuits facing crypto exchanges will push US lawmakers to develop a comprehensive framework to regulate the crypto industry, including including the separation of responsibilities between the SEC and the Commodity Futures Trading Commission [CFTC].
The SEC has taken a firm stance in treating many assets as securities, showing strong determination in this regard. The report indicates that the SEC believes that a significant portion of Cryptoasset should be considered securities. As a result, the SEC asserts that many crypto companies and trading activities are subject to their supervision. It must comply with the regulatory frameworks currently used for traditional securities.
JPMorgan has said that Coinbase and Binance's ongoing legal cases are opaque in nature. The bank remains uncertain about the status of some Cryptoasset. This means that the legal context surrounding them continues to be unclear. Read more report:
“[These lawsuits] are creating more urgency for US lawmakers to put in place a comprehensive regulatory framework this year.”
The bank stated that unless a comprehensive framework is established, it is expected that crypto activity will continue to divert away from the United States. It is potentially geared towards decentralized entities. Additionally, the report suggests that crypto venture capital Capital may remain limited. They can also be secured in the absence of clear regulations.
Despite the current negative impact on the industry and financial stress on the exchanges involved, these lawsuits are expected to have a positive impact on the crypto industry going forward. However, in the meantime, digital assets may be affected.
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