Banning cryptocurrency in the U.S. is no longer feasible; the practical solution is to improve the appropriate legal framework.
The cryptocurrency sector has developed strongly and globalized, making the application of traditional securities laws no longer relevant. Regulatory policies need to change to support the industry in developing more sustainably and transparently.
MAIN CONTENT
The SEC needs to adjust its approach to align with the characteristics of digital assets.
Gensler's tough policies have previously harmed the market and investor trust.
The U.S. government promotes cryptocurrency law reform to support innovation and focus on addressing bad behavior.
Should the SEC continue to apply traditional securities laws to cryptocurrencies?
The SEC is still seen as the appropriate agency to regulate cryptocurrencies, but it must change its perception of digital asset types.
Matt Levine notes that many cryptocurrency projects have securities elements but are not entirely like traditional stocks, so a more suitable protection mechanism is needed.
During Chairman Gary Gensler's tenure, the firm stance that most tokens are securities and litigation created a confrontational environment, slowing the industry's development. In contrast, Chairman Paul Atkins, with the Project Crypto initiative, focused on facilitating the registration of tokens according to the true nature of cryptocurrency.
How does Gensler's policy affect the cryptocurrency market?
The "strike first, punish later" method under Gensler aimed to enhance control but caused negative reactions within the community and the market.
Research from a 2024 scientific paper indicates that cryptocurrency prices fell by an average of 5.2% in the three days following the SEC's penalty announcement and dropped by up to 17.2% in the following month, while trading volumes plummeted, especially for smaller and riskier tokens.
The lack of a clear legal framework makes investors cautious, leading to market instability and spreading effects to larger coins.
How does the Trump administration's digitalization strategy affect cryptocurrency?
On July 30, 2025, the White House released a 166-page report to strengthen its pioneering position in the field of digital finance.
The main goal is to promote innovation, end regulation through penalties, and focus on addressing bad behavior instead of the entire cryptocurrency industry.
Jamie Dimon, CEO of JPMorgan, stated that the bank will participate and learn in the stablecoin space, expecting the trend of tokenization of investments and stablecoin services to gradually materialize.
"Regulators will not be able to go back to banning cryptocurrency anymore; the only feasible path is to regulate it appropriately and be accepted."
Matt Levine, analyst, August 2025
What will the SEC do next with cryptocurrencies?
The SEC currently faces three options: banning, ignoring, or reasonably and practically regulating cryptocurrencies.
Matt Levine believes that the first two options are no longer feasible in the context of the new market and political landscape. Therefore, the only path left is to build strict regulations that align with the desires and characteristics of the industry.
Personnel changes and pressure from the U.S. government promise to bring cryptocurrency regulation into a more stable and industry-friendly development phase.
Frequently Asked Questions
Will the SEC continue to view cryptocurrencies as securities?
The SEC is shifting towards regulation that better fits the nature of cryptocurrencies, not applying classical securities laws directly.
How does Gensler's policy affect investors?
The tough policies have significantly reduced the price and liquidity of many tokens, causing short-term instability in the market.
How does the U.S. government support cryptocurrency development?
The 2025 White House report focuses on promoting innovation, avoiding punitive-style regulation, and addressing bad behavior.
Are banks participating in cryptocurrency?
Large banks are gradually providing tokenization and stablecoin services, in line with the trend of digital finance.
How will the SEC prioritize cryptocurrency regulation?
The SEC's priority is to create a clear, transparent legal framework that balances investor protection and promotes innovation.
Source: https://tintucbitcoin.com/matt-levine-sec-khong-the-bo-qua-crypto/
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