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Forbes Reports That Every U.S. Crypto Exchange Is Being Investigated By The SEC – Fin Tech



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Forbes reported today that “every” U.S. crypto
exchange is being investigated by the SEC. Forbes cited to an
unnamed staffer for Senator Cynthia Lumis (R-Wy) as the source of
the information. The Forbes article notes that according to the
crypto site, CoinGeko, there are 40 U.S. crypto exchanges. If this
this statement by Senator Lumis’ staffer is accurate two things
are certain:

  1. The CFTC and Commissioner Caroline D. Pham, who issued a public
    statement referring to the SEC case against a former Coinbase
    employee as “a striking example of regulation by
    enforcement” are now VERY unhappy with the SEC;

  2. U.S. based crypto exchanges need to conduct a full scale review
    of their compliance policies and have a clear and defendable
    rationale for why the cryptocurrencies that they list are not
    securities.

Given the tensions between the SEC and the CFTC, it seems
increasingly likely that Congressional action is the only way that
burning questions of whether a particular cryptocurrency (or NFT)
is a security and who will be the primary regulator of crypto will
be answered. Right on cue, yesterday, U.S. Senators Debbie Stabenow
(D-MI), Chairwoman of the Senate Committee on Agriculture,
Nutrition, and Forestry, and ranking member John Boozman (R-AR),
introduced the Digital Commodities Consumer Protection Act of 2022
(DCCPA). The DCCPA would give the CFTC new powers to regulate
“digital commodities,” which the DCCPA defines as
cryptocurrencies including Bitcoin and Ether.

Only time will tell if the DCCPA or the Responsible Financial
Innovation Act, introduced on June 7, 2022, sponsored by Senator
Lummis and Senator Kirsten Gillibrand (D-NY) will ever be made into
law. Until we have action by Congress it seems like the SEC and
CFTC will continue to try and stake their claims as the leading
U.S. crypto regulator. Just how much this uncertain regulatory turf
battle will impact the growth of cryptocurrencies and related
industries remains to be seen.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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Taxation Of Non-Fungible Tokens

BakerHostetler

Part Four in our series discusses U.S. federal income tax issues relating to Non-Fungible Tokens (NFTs) and provides an overview of how NFTs may be treated for U.S. federal income tax purposes.



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