In the wake of the appointment of an American cryptographic tsar and the announcement of complete cryptography legislation, many believe that the era of “application regulations” in the United States is completed. But while the SEC and the CFTC now have convivial presidents, state regulators and general prosecutors are about to take their place as an application of aggressive crypto.
For years, the aggressive approach to “application by application” of the SEC has stifled the growth of the cryptographic industry and made that many call once to a complete regulatory framework which would end the “war against crypto” once and for all. For this reason, many in the industry have come together to support Pro-Crypto candidates.
This strategy bore fruit. Donald Trump was elected first president to praise his support for the cryptography industry, despite his somewhat antagonistic position towards the crypto during his previous mandate. Since his entry into office, Trump has appointed David Sacks as the country’s first “Tsar Crypto”, has created a working group’s working group on the digital asset markets and has appointed dry and CFTC temporary chairs that have already expressed their support to cryptographic industry.
But these federal changes will not end the aggressive application measures of state regulators who face public pressure to take measures to reign in crypto. Many in the industry have already faced the aggressive application of regulators such as the New York Department of Financial Services (NYDFS), which recently obtained a settlement of $ 37 million from a cryptographic loan platform. Regulators like the NYDF were aggressive even when the SEC is engaged in aggressive tactics against the crypto, so when the dry reduces its efforts, you can expect them to fill the void.
Other states follow the example of New York. At the end of 2023, California promulgated the law on digital financial assets, which enabled its Ministry of Financial Protection and Innovation to concede and regulate digital assets. And the Illinois Legislative Assembly recently began to consider a new bill called the law on digital assets and consumer protection which will allow the State to regulate any company engaged in a “commercial activity of assets digital ”with an Illinois resident.
General Prosecutors
It is possible that new federal legislation can limit the capacity of state regulators to bring their own questions of application. On February 4, the chairs of the Chamber and Senate committee expressed their confidence in the adoption of complete legislation which would create a regulatory framework for the crypto in the next 100 days. Since the federal law pre -empts state law, the new legislation could slow down certain regulatory activities of the State.
But even if state regulators are held by new legislation, this legislation would not limit the capacity of the prosecutors of the State to bring prosecution alleging fraud by companies linked to the crypto. The AGS state previously brought these prosecution when the CRU Crusade “Application” of the SEC has been in full swing. In 2023, the Prosecutor General of New York, Letitia James, filed a legal action alleging that an Crypto trading platform was falsely represented as an exchange. Later that year, the platform was satisfied with $ 22 million and agreed not to do business with New Yorkers in the future.
Admittedly, a national regulatory framework and the fact of having Pro-Crypto regulators in Washington will provide more certainty and predictability to cryptographic industry. But whoever believes that “regulation by application” is finished is naive. You can always expect aggressive proceedings and regulator activities in the coming years. The place can go from dry to the United States, but the impact on cryptographic companies and their customers will remain.
