Last Tuesday, September 21, the chorus calling for more crypto regulation hit a sort of crescendo.
Earlier on September 14, testimony before the Senate Banking Committee Former CFTC and current SEC Chairman Gensler noted that cryptocurrencies straddle several different regulatory regimes, posing broad risks:
âCurrently, we just don’t have enough investor protection in crypto finance, issuance, trading or lending. Frankly, these days it is more like the Old West or the old world of the “buyer beware” that existed before the passage of securities laws. This asset class is rife with frauds, scams and abuse in some applications. We can do better.
Gensler suggested that the SEC has broad regulatory power in the area, but needs to step up enforcement efforts in coordination with other agencies. Some senators rebuffed the lack of clarity of the SEC’s “investment contract” -based efforts so far, echoing similar criticisms from SEC Commissioner Hester Peirce and others.
Gensler expanded on these themes in a September 21 interview with The Washington Post , suggesting enhanced enforcement to deal with investor protection, AML, tax, and system stability risks posed by cryptocurrencies and other decentralized finance activities. Calling the technology and its prospects “interesting”, Gensler nevertheless cautioned against its ultimate sustainability:
âI don’t think there is long term viability for five or six thousand forms of private money. History tells us. [Referring to the private-money schemes in the mid-1800âs after President Andrew Jackson dissolved the Second Bank of the U.S. in 1833].
Gensler’s remarks follow a recent enforcement action set as a digital platform Poloniex, LLC as an unregistered exchange and a threat of enforcement action leading Coinbase to suspend its crypto lending program -proposed currency.
While Gensler spoke with the To post, the acting controller of Currency Hsu told the Blockchain Association on September 21 that the industry was reminding him of the ‘fools gold rush’ he witnessed as an SEC official in the process. of the 2008 financial crisis, and it âcould be on the dawn of another with cryptocurrencies and decentralized finance.  Hsu asked if many challenges and crypto innovations really address real substantive issues, saying “financial innovation should be rooted in a goal.” Hsu’s remarks came as the European Banking Authority warned that regulators were unaware of the rapidly changing interplay of banking and digital markets. 
The day before, the Global Financial Markets Association and related trade groups opposed a June proposal that would extend all of Basel’s capital reserve requirements to crypto. The groups noted the high volatility of crypto and that tight capital ratios would be counterproductive and push crypto back into the shadows by forcing banking institutions to sit on the sidelines. Instead, banking business groups have noted that (a) blockchain and digital ledger technology hold great promise, especially for clearing and settlement efficiency, (b) banks and similar institutions. can play a self-regulating and standardizing role in digital asset markets, and (c) customers wanted digital assets as part of their banking relationships. 
Also on September 21, the Biden administration began to deliver on its promise to step up the fight against cybercriminals. The Treasury Department has added SUEX – a Russian digital currency platform – to its OFAC list as a sanction for alleged laundering of ransomware payments. 
Meanwhile, the People’s Bank of China has announced plans to launch a blockchain-less intermediated digital yuan in time for the 2022 Winter Olympics.
Crypto always has a sense of innovation for its own good-west that far exceeds its purported use cases, so regulators are coming for it – even as they struggle to allow innovation to respond to those cases. legitimate use. It is likely, however, that standards will remain unclear with the development of enforcement rules as regulatory regimes come into play.
 Gensler’s testimony from September 14 is here: https://business.cch.com/srd/GenslerTestimony9-14-21.pdf
 The Washington post Interview with SEC chairman Gensler, it’s here: https://www.washingtonpost.com/washington-post-live/2021/09/21/path-forward-cryptocurrency-with-gary-gensler-us-securities-exchange-commission-chair/
 Here are the remarks of Acting Controller Hsu: https://www.occ.gov/news-issuances/speeches/2021/pub-speech-2021-101.pdf
 The ABE warning was flagged by Reuters, here: https://www.reuters.com/business/regulators-lack-understanding-banks-digital-marketplaces-eu-watchdog-says-2021-09-21/
 The comment letter from GFMA Basel is here: https://www.gfma.org/wp-content/uploads/2021/09/joint-trades-bcbs-prudential-treatment-of-cryptoasset-exposures-response.pdf
 Treasury press release concerning: SUEX, is here: https://home.treasury.gov/news/press-releases/jy0364