April 19, 2024
Latest Cryptocurrency News

CoinShares CSO Meltem Demirors Highlights Growing Political Influence of Cryptocurrency

Meltem Demirors, the Chief Strategy Officer (CSO) at CoinShares, believes that cryptocurrency is steadily gaining influence within Washington and is emerging as a significant political force. In a recent conversation with Bloomberg, Demirors stated that the crypto landscape has transformed from a small niche community with diverse perspectives and numerous projects to a global industry. Consequently, she highlighted the formation of various groups and trade associations aiming to pool resources and leverage collective power for lobbying efforts. These endeavors involve supporting candidates who align with their viewpoints on regulatory and policy directions.

Demirors emphasized that cryptocurrency is on its way to becoming a substantial player in the realm of US regulation, functioning as a “political powerhouse.” She noted that increased campaign contributions from crypto entities will be directed towards candidates who are friendly to the crypto cause. Demirors also underlined the urgency of addressing the regulatory standstill in the US, contrasting it with the progress made by other jurisdictions in establishing clear regulatory frameworks for the crypto sector. For instance, she highlighted Hong Kong’s implementation of a new regulatory framework for cryptocurrencies, allowing retail investors to trade specific “large-cap tokens” under certain safeguards.

The Hong Kong Securities and Futures Commission (SFC) has started issuing licenses to crypto exchanges as part of this framework. Demirors observed that positive developments in these regions are driving economic activity and suggested that the US needs to consider crypto regulation as a matter of national and economic interest to maintain its competitiveness.

Commenting on the current state of the overall crypto market, Demirors mentioned a lack of trader interest. While publicly listed crypto products experienced approximately $750 million in inflows over the year, recent outflows occurred due to investors seeking profits and reducing risk exposure. She characterized the environment as still being focused on minimizing risks.

Demirors’s remarks are pertinent in the context of increased scrutiny by US regulatory bodies, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), of crypto firms. Earlier in the year, the CFTC sued Binance and its founder Changpeng “CZ” Zhao over allegations of offering unregistered crypto derivatives in violation of US law. Similarly, the SEC brought a lawsuit against Binance and its CEO for alleged violations of federal securities laws, outlining multiple charges including operating an unregistered exchange. The SEC has also taken enforcement actions against other crypto exchanges like Kraken and Bittrex, as well as the crypto lending platform Nexo throughout the current year.

Photo by David McBee

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