The Regulators Roar, But Can Washington Act on Crypto?

Plus, how other countries do it.

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The Regulators Roar, But Can Washington Act on Crypto?

This summer has seen a tsunami of regulatory action aimed at the fintech and crypto worlds. The highest wave was the insider trading case against a former Coinbase executive and two associates, which FIN covered last week. A growing group of US Senators is seeking to crack down on Zelle—the digital payment system owned by a consortium of large banks—because of rampant fraud. There is also the joint action between the Federal Deposit Insurance Corporation (FDIC) and the Board of Governors of the Federal Reserve, demanding that crypto broker Voyager Digital stop representing itself as having FDIC protection. (Even without the regulatory headache, Voyager Digital is a deeply wounded company, having declared bankruptcy earlier this month and rejected a rescue effort from FTX.) And of course there is the ongoing battle between Coinbase and the Securities and Exchange Commission (SEC), over whether the platform is illegally offering securities to American customers, which we’ll come back to.

Yet for all the regulatory roaring, the prospect of fundamental change or clarity in how the United States regulates crypto seems not much closer today than at the beginning of the year.