ICE CEO: Cryptos will be regulated as securities
FTX collapse accelerates push for cryptocurrency regulation in the United States
The CEO and founder of Intercontinental Exchange (ICE), one of the world’s leading operators of financial exchanges, has argued that the vast majority of cryptocurrencies will likely be regulated in the United States under existing securities laws.
Most cryptos will be regulated as securities
According to Reuters, Jeffrey Sprecher, whose firm owns the New York Stock Exchange, told a Goldman Sachs financial services conference: "What does that mean? It means more transparency, it means segregated client funds, the role of the broker as a broker-dealer will be overseeing and the exchanges will be separated from the brokers. The settlement and clearing will be separated from the exchanges."
Sprecher opposed the creation of new legislation to govern cryptocurrency trading, adding: “The laws already exist and I think they're just going to be implemented more strongly.”
With the cryptocurrency sector having lost $2tn in total capitalisation between November 2021 and November 2022, regulators and legislators were already stepping up their efforts to provide workable frameworks for the volatile sector.
This momentum was accelerated last month after the collapse of FTX. The second-largest cryptocurrency exchange in the world collapsed in a matter of days after reports that its founder and CEO Sam Bankman-Fried had allegedly misused client funds and potentially committed fraud.
CME chief echoes Sprecher
In the wake of the collapse, Terry Duffy, the CEO of ICE’s largest rival, CME Group, said that he had called Bankman-Fried “an absolute fraud” to his face.
Duffy also complained about the attitude of both the regulators and members of the US Congress in the run-up to the scandal. He outlined his opposition to the creation of a separate regulatory framework for crypto and observed that only he and ICE were “calling B.S. on these clowns” in the months leading up to November.
Sprecher’s latest comments came as the cryptocurrency industry awaits the conclusion of the SEC’s lawsuit with the issuer of the XRP cryptocurrency, Ripple Labs. The regulator has argued that XRP constitutes a security and therefore that Ripple carried out an unregistered securities offering when it launched the token.
The FTX scandal has put greater pressure on the chair of the SEC, Gary Gensler, to provide a comprehensive framework for crypto regulation. A leading Democratic Senator, Elizabeth Warren, is working on a bill that would give the SEC significant oversight over the crypto sector.
Warren, whose 2016 taxation legislation was partially drafted by Bankman-Fried’s tax expert father, Joseph Bankman, has argued that FTX’s collapse showed “how much of the industry appears to be smoke and mirrors.”