Crypto to Get Some Regulatory Relief?

Is crypto winter finally paving the way for crypto spring? Some believe the answer is yes.

In one such analysis, three factors are put forward to substantiate the claim: the return of ‘smart money’, Ripple effects from the XRP Decision, and bipartisan regulatory endeavors.

The return of the “smart money” refers to the decision of BlackRock and Vanguard, the two largest asset managers in the world, to support crypto. In June 2022, BlackRock filed for a spot Bitcoin ETF with the SEC. Meanwhile, Vanguard bought millions of shares in the two largest US bitcoin mining companies Riot Blockchain and Marathon Digital. As a result, Vanguard owns a 10% stake in Riot. Both circumstances bode well for mass adoption.

Then there’s the SEC vs. Ripple case. On July 13, Judge Analisa Torres ruled partially in favor of Ripple, writing that “XRP, as a digital token, is not in and of itself a ‘contract, transaction or scheme’ that embodies the Howey requirements of an investment contract.” The decision will likely affect other coins in the market that the watchdog aimed at classifying as securities. For example, Solana.

The bipartisan momentum is also building up, with a half dozen Democrats recently teaming up with the Republicans at the House Financial Services Committee. The goal is to push through a comprehensive regulatory framework for crypto assets. A handful of Democrats also voted to advance a bill regulating the payment of stablecoins.

The author of the analysis also asked Haun Ventures Chief Policy Officer Tomicah Tilleman to comment on the matter. He emphasized that the most recent crypto winter was accompanied by a mini-ice age in the world of crypto policy”, praising “diverse coalitions of bipartisan lawmakers” who are “now moving forward with serious legislation that would protect American consumers and the country's capacity for innovation in an increasingly competitive global environment."

In the same vein, another commentator U.S. Senator Cynthia Lummis, also known as the crypto queen, said that she’s encouraged “by movement on crypto asset legislation in the House as well” and looks forward to more actions.

It appears that the SEC has taken a serious hit following Judge Torres’s ruling on July 13. It would not be an overstatement that the watchdog wanted to use this case as a precedent to take down many other assets. The fact that it has at least partially failed to do so shows that the power that the SEC alongside other agencies like the CFTC wanted to gain may never materialize. 

As a result, it may affect the outcome of both Coinbase and Binance vs. SEC lawsuits. Especially since now, everyone has access to the controversial Hinman’s files that have proved to contain very doubtful definitions of what security is in the world of crypto.

While the chances of their triumph have indeed increased, there’s still no guarantee that they will win. Much depends on how the case is built, both by the plaintiffs and the defendants.

Also, the outcome of the elections set to take place this November when American voters will take to the polling station to elect Congress members and the US President play a role. 

The potential political volatility that could ensue after the election is likely to impact the speed of legislative changes, including that of crypto, even if the members of Congress remain largely the same. 

While Blackrock and Vanguard’s foray into the crypto market shows that Wall Street is taking crypto seriously, and it could indeed fuel the next bull run, it is also worth remembering that we have seen such moves from big companies in the past. The result is always mixed.

All in all, we concur with Tilleman’s statement that while a receding mini-ice age in the world of policy doesn’t mean the end of crypto winter, it seems like the momentum for a more positive change has indeed been built up.

Previously, Gagarin News begged the question if celebrities are done with crypto commercials.