According to an pinion article published by Michael Selig in CoinDesk: The year 2024 is likely to witness significant compromises in cryptocurrency regulation, says Michael Selig, a lawyer at Willkie Farr & Gallagher. The forecast comes following a period of intense conflict between crypto firms and regulatory bodies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
In 2023, these institutions launched over 200 enforcement actions against participants in the crypto industry, blaming it for fraud, scams, bankruptcies, and money laundering. Regulatory enforcement indiscriminately targeted firms that both flouted the law and those that tried to comply with it. This landscape affected a range of entities, from a distributor of unique animated cat JPEGs to prominent celebrity "influencers" and several decentralized organizations.
Despite this stringent enforcement environment, the tide may be changing. Both the SEC and the CFTC have encountered legal challenges, shifting regulatory dynamics. While significant legislation in an election year is unlikely, regulators might consider reducing their enforcement-focused approach and work more collaboratively with the industry to develop interim regulatory structures.
Considering recent legal challenges by Grayscale and Ripple against the SEC and other regulators, these organizations are expected to make compromises in 2024. The SEC authorized a futures-based Ether ETF following a lawsuit by Grayscale, demonstrating its resilience to legal challenges. Rumor suggests approval of a spot Bitcoin ETF could be on the horizon, potentially as soon as January 2024.
Legal battles that afflict the SEC's proposed regulations are likely to continue and influence regulatory decisions. Increasing institutional demand for crypto and a desire to broaden product offerings will likely require increased interaction and collaboration between industry players and regulators. The prediction is that 2024 will see an easing of tensions, resulting in a somewhat warmer relationship between regulators and crypto industry figures.