On Friday afternoon, the US Securities and Exchange Commission announced the establishment of the Office of Crypto Assets and the Office of Industrial Application and Services.
The two offices will bolster the Division of Corporation Finance Review Program (DRP). The units will vet entrants to protect the market from rogue players.
According to the agency, the two offices will commence operations this fall. This will be the turning point for the Crypto market in the US. The industry has been grappling with uncertainty due to the uncertain regulatory environment.
The DRP is Adapting to the Dynamic Markets
There is a widespread consensus in the market that the Crypto market is dynamic and fast-paced. Hence, establishing guidelines for the market has been daunting.
Commitments by the policymakers like Gary Gensler, the SEC chair, to streamline the Crypto market have not materialized. For instance, he assured investors on the CNBC Jim Cramer show a few weeks ago that Bitcoin will be classified as a commodity. To date, this has not come to fruition.
A Move in the Positive Direction
Despite the challenges in following through with its mission, the US SEC is on the right track. The DRP has seven offices monitoring the different sectors of the finance industry. When the two offices commence operation, the entity will have nine offices staffed by industry experts.
The mission of the US SEC is to promote capital formation and protect investors. Already, the Crypto market has a capitalization of $1 trillion despite being less than a decade and a half old. Digital assets have immense potential for capital creation amidst the global economic meltdown.
On the other hand, the Crypto market faces risks such as fraud and bear trends. The risks erode confidence and impede growth. Further, bear trends discourage using Crypto as a store of wealth. Hence, there is an urgent need to mitigate these risks.
Crypto has Gone Mainstream
According to Renee Jones, crypto assets, life sciences, industrial applications, and financial institutions are their core mission. The Director of the Division of Corporation Finance alludes that the SEC is expanding its capacity.
The transition is also in high gear in other agency sectors. In June, the Cyber Unit was renamed the Crypto Asset and Cyber Unit after increasing its human resources from 30 to 50.
Following the reorganization, the Office of Crypto Assets will be able to review the filings involving Digital Assets. It will also liaise with other units to review issues of Crypto.