SEC · Wall Street · US Congress · CryptoSlate
SEC’s $75 million crypto fundraising plan runs into bank backlash and threats of legal action
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US banks warned that proposed SEC crypto exemptions could drain deposits as investment managers pushed for broader access to digital assets.
Key facts
- It cited an earlier modeled scenario suggesting stablecoin incentives could shift as much as $1.3 trillion from community banks and reduce lending capacity by approximately $850 billion
- The competing demands emerged as the Securities and Exchange Commission's (SEC) Oct
- In its Oct. 19 letter, Bitwise said fund sponsors currently face substantial uncertainty when assessing whether a token remains subject to an investment contract
- Former SEC enforcement official John Reed Stark and Duke researcher Lee Reiners separately demanded the proposal's withdrawal, arguing that the agency lacks sufficient statutory authority to create
Summary
01 US banks and Wall Street firms submitted competing demands as the SEC's comment period for its proposed crypto exemptions closed. 02 Bitwise wants broader token access for investment funds, while community banks warn of potential $1.3 trillion deposit flight linked to stablecoin growth. 03 The SEC must weigh demands for crypto expansion against banking risks and legal challenges that could delay or derail the proposed exemptions. The competing demands emerged as the Securities and Exchange Commission's (SEC) Oct. 20 comment deadline for its proposed Regulation Crypto Assets expired, exposing divisions over how far regulators should go in easing restrictions on cryptocurrency fundraising and investment.