After the SEC's recent crackdown on several cryptocurrency companies, Jeremy Allaire doesn't think the agency is particularly well suited to regulate stablecoins.
He argues that these assets are part of the banking industry and therefore need to be overseen by another U.S. regulator. Over the past few weeks, U.S. securities regulators have begun going after several local crypto firms, starting with Kraken and its staking service. The exchange had to settle with regulators, pay a $30 million fine, and cease its staking platform.
A few days later, the SEC issued a Wells warning to Paxos, accusing the company of selling unregistered securities in the launch of the Binance USD (BUSD) stablecoin.
This upset many in the community, as stablecoins are widely considered non-securities. It has also drawn attention to other stablecoin issuers such as Tether and Circle. The latter’s CEO, Jeremy Allaire, spoke about the current situation in an interview with Bloomberg, asserting that the SEC does not appear to be the proper regulator for such crypto assets.
Still, Allaire admitted that “not all stablecoins are created equal.” This comes less than a month after Terra (UST)’s controversial algorithm attempt collapsed to almost $0, wiping out the entire $40 billion ecosystem. Year. Meanwhile, Circle’s CEO praised the SEC’s recent proposal to impose stricter rules on cryptocurrency custodians.
“We think having qualified custodians that can provide the appropriate control structures and bankruptcy protections and the other things is a very important market structure and very valuable,” Allaire said. “We have seen a lot of lessons learned that random exchanges have your assets. There is a reason why you have that kind of rule.”
