It is often difficult to understand changes and changes in the structure and scale of regulatory units. In a rapidly evolving sector like cryptocurrency, it is even more challenging than usual. It is not certain whether major new developments will help or lead to bust. There could also be persuasive arguments in both directions.
If you are planning a significant crypto investment, it is important to understand the changes in regulations and what they mean. So, we’ll show you what the latest big changes are and what you need to do about it to get ahead of the game.
According to a New York Times report issued on February 4, the Securities and Exchange Commission (SEC) will reduce 50 cryptocurrency law enforcement groups in line with the new presidential administration’s priority policy. It is unclear whether any or all of the activities originally assigned to the group will be handled by the newly established cryptographic task force created by the new administration as part of the initiative.
For now, the SEC’s cryptocurrency sector exercise is set to be even weaker than before. From mid-2013 to the end of 2024, the SEC only carried out 207 cryptocurrency-related actions, including litigation and other administrative proceedings.
Still, this new development has some important implications for investors. Supporters of the SEC scaled units include those who argue that the cryptocurrency sector can grow faster if there are fewer regulatory obstacles. That may be the case for accepting new types of financial derivatives a little faster than before or at all, but given the need to protect investors from total illicit actions, the arguments are disrupted. It starts to become. I’m confident enough to commit capital to cryptocurrency.
A chain like Solana (Cryptography: Sol) And Ethereum, which has been plagued by fraudulent activities and total fraud for years, has rarely changed the status quo by experiencing even less enforcement.
On the other hand, it is important to note that the situation in many sub-sectors on these chains is probably much more difficult to get worse, especially for the meme coin. Most of the coins in the meme are simple attempts to withdraw money from investors within minutes of capital being committed. And serious investors don’t dare to dabble in those spaces for reasons other than lack of enforcement.
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Legal protection theoretically reduces many of the risks of these assets, but they are still fundamentally incredibly unstable, dangerous and have no strong connection to basic values.
So there is no necessarily a new headwind here. Expect fringes of these ecosystems to be as extractive and dangerous as ever.
Big old chains like Bitcoin, (Cryptography: BTC) Already deeply integrated into the traditional financial system, it is covered at least in part by protections that affect the sector. However, it is not clear that fewer SEC enforcement will change more than anything else.
Investors can purchase coins directly through retirement or brokerage accounts via retirement or securities trading accounts (ETFs). Despite its low reliability, cryptocurrency exchanges require user coins to be stored and distributed on demand. However, the weaker regulations result in fewer attractive investment facilities.
Finally, those who are technically inclined can buy it and hold it directly on the blockchain. It’s not that the SEC is doing much to crack down on fraudulent blockchain interaction software or fraud that includes other vectors for theft.
For most investors, the backbacks of the SEC Crypto executive unit will not have any immediate, and never have a specific impact.
With major cryptocurrencies such as Solana, Bitcoin, and Ethereum being well established, there is a number of problematic activities in the chain, but the regulatory guardrail needs nothing to continue playing There are also powerful, multifaceted investment papers that do not. The coins are still worth buying as these papers remain true.
If you lose money investing in fraud projects in their chain, be aware that there is even less protection and even less hope of salvation.
Consider this before purchasing stocks in Solana.
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Alex Kulcidi holds positions in Bitcoin, Ethereum and Solana. Motley Fool has Bitcoin, Ethereum and Solana positions and is recommended. Motley Fools have a disclosure policy.
Is this one new move a new tailwind for cryptocurrency by the SEC or a headwind? Originally published by The Motley Fool
