The crypto market has been rapidly increasing in size, the demand growing at an unprecedented rate. In response, the Securities and Exchange Commission has voiced the need to bring the crypto space into compliance with existing securities legislation, in order to ensure that investors in digital assets receive the same protections as other markets.

However, Ripple Policy Head Susan Friedman has identified a crucial flaw in this approach. She believes that securities laws cannot be simply applied across the board to the crypto industries, given the significant differences between traditional securities and digital currencies. Unsecured financial claims are standard for securities, whereas cryptocurrencies settle without an intermediary and involve no financial claims of any kind.

Furthermore, one of the main points of contention between the crypto world and its regulatory counterparts is the lack of protective legislation. This has led to a range of fraudulent activities, creating a palpable danger for investors in such a wide-open marketplace. For these reasons, it is not only critical, but also entirely possible, to have specific regulations for the crypto space.

Chairman of the SEC Gary Gensler and Ms. Friedman may have different views when it comes to the regulatory infrastructure that should be applied to the industry, yet they both understand that investor protection must come first. Thus, it is essential that the SEC act prudently and take the necessary steps to prevent any illegal activities or fraudsters from taking advantage of those investing in the crypto market.

To foster innovation yet keep players safely within the boundaries of the law, regulatory authorities need to carefully consider both the incentives and risks associated with the crypto market. It will be up to these bodies to find a balance between the need for investor safety and the desire to elevate the industry on the global stage by encouraging legitimate use of blockchain technology.



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