Why is the SEC so slow to regulate cryptoassets? Literally everything that they combatted for stocks and traditional assets is now taking place in the crypto ecosystem.
The SEC stated a few years ago it doesn't regard cryptocurrencies as securities, so that's why they don't police it. (IMO they are clearly securities, but the SEC may not want to allocate resources to policing it.)
What many people don't realize is that insider trading of assets other than securities could still potentially be criminal fraud. However without the SEC, there is no specialized police force for addressing it.
The SECs core job is to protect investors and assure orderly markets. But it is not clear that buying a crypto asset IS an investment and one job of markets is to take money away from people who make dumb decisions (like buying a crypto "asset" only because Coinbase listed it). So stopping this doesn't actually fit their mandate any more than stopping people betting on sports or buying lottery tickets does.
And that's without getting into the other points people have listed:
* the SEC is toothless
* FX isn't a regulated market, you absolutely CAN use "insider" info to trade Euros, USD etc.
* its technically AND legally hard to prove insider trading in Crypto (and elsewhere)
* if they did, and Coinbase etc moved their operations to unregulated destinations would that actually make anyone safer?
Because SEC is something specific to US and crypto is international perhaps? I doubt SEC has anything to say in this regard when the trading happens to belong to a citizen of China, for example. And while I do know Coinbase is US firm, so is AMEX. Insider trading at AMEX in regard to foreign citizens isn't something they can do anything about it, can they?
The exchange is still physically registered in the US, similar to how non US citizens can place trades on NYSE etc. This cowboy market is madness and irresponsible.
But the crux is that those trades didn't occur on Coinbase, the assets hadn't even been listed yet. So it might very well be a case of a non-us citizen trading on a non-us exchange (or defi exchange). What can the SEC do in this case?
Yes it does, hence why I gave both of them as examples above. Just take a look at AMEX history in regards to insider trading and foreign citizens, then tell me what SEC did in those cases. Coinbase is just the latest kid in the finance sector, with just a fraction of toys AMEX has palying with for decades already.
Let me put it this way. Coinbase is just a sliver of what money AMEX is trading and is used as dust in eyes to blind people at real insider trading that happens in real money makers, which are AMEX and the rest of well established banks. Good luck SEC doing anything about it.
Going to play the "my uncle works at Nintendo" card here. My friend works for the SEC and has been in regular contact with me for crypto technical details. Securities is definitely working on rules, but it takes time for the rule makers to learn the technology and understand how to best regulate it.
Because they are a gutted, disempowered US-regulator. Wrecked by 4 years of Trump and countless other presidents before them.
Possibly there is also not the political will to ramp up the regulatory speed and power although I still have hope that Biden will be able to change that at least a bit.
What are you talking about? Read some history prior to the 4 years of the SEC.
Look at the suggested reforms the SEC was supposed to undertake AS IDENTIFIED BY CONGRESS. Then look at what actual reforms where implemented.
I'll help you out - almost none. The SEC has had a monopoly on financial market regulation since the 1930s and is just now becoming a victim to the cultural side affects of this monopoly. Shit, I actually think the SEC has done a phenomenal job regarding this and all other aspects of their job.
> The SEC has had a monopoly on financial market regulation since the 1930s
The Commodity Futures Trading Commission, Financial Industry Regulatory Authority, National Futures Association, Consumer Financial Protection Bureau, and many others would like a word.