Malecki Law’s founder, Jenice Malecki, was recently quoted in a Crypto Times article about crypto regulation as it relates to the impending presidential election.
Ms. Malecki shared her thoughts that no matter who is to be elected as President, that there is one obvious takeaway –“the crypto industry needs regulation.” Ms. Malecki further explained that the current non-regulation hurts investors, like yourself, which also gives room for bad actors to flourish. Did your advisor recommend that you purchase crypto based securities? It may not have been in your best interest based on your investor profile. A Crypto-Securities law firm in New York, like Malecki Law, can help you analyze and conclude whether Regulation Best Interest was violated.
Ms. Malecki and Malecki Law have experience in cases involving crypto based securities, and have seen that there is more work to be done. At least, if the product is clearly a security under the Howey test, the SEC will regulate it. However, if the crypto product is not clearly a security, there is more gray area as to which regulator (SEC or CFTC) has jurisdiction and why. This naturally leaves a gap in regulation, allowing misconduct to not just occur but to succeed without monitoring.
The article goes on to discuss that the SEC’s current chair, Gary Gensler, has been a skeptic of crypto throughout his tenure in the SEC’s office. Former President Donald Trump has indicated that he would work on removing and replacing Mr. Gensler if elected. If you are a conservative investor with only stock and bond experience, it is likely that an investment recommendation to invest in crypto based securities is inappropriate. If your broker suggested you purchase these types of products, you should speak with a Crypto-Securities attorney in New York, like the lawyers at Malecki Law, to review your crypto-based investments and overall situation.
Former President Trump has also alluded to potentially appointing a former commissioner of the SEC, Dan Gallagher, or a current commissioner of the SEC, Hester Peirce. Peirce has been outspoken about her views regarding Gensler’s take on the crypto world. For example, Peirce, and her co-commissioner, Mark Uyeda, stated in a recent dissenting opinion that, “Leaving crypto to be addressed in an endless series of misguided and overreaching cases has been and continues to be a consequential mistake.” If you sustained substantial losses derived from crypto based securities, you may have a claim in FINRA arbitration. You should have a New York Crypto-Securities Lawyer, like the lawyers at Malecki Law, review your portfolio accordingly.
According to a Reuters article on the future of crypto regulation and a study by Security.org analysts, about 40% of the U.S. population of adults hold some sort of crypto type asset. The study also indicated that this was a 10% increase from 2023. It also found that women ownership in crypto has drastically increased from 18% to 29%. These numbers seem to show that crypto is here to stay, and regulation may just have to catch up.
On May 22, 2024, the House of Representatives passed Financial Innovation and Technology for the 21st Century Act (FIT 21), with bipartisan support. Among other things, FIT 21 is meant to clearly provide the CFTC with certain jurisdiction and clarify the SEC’s jurisdiction when digital assets are considered part of an investment contract. If you have face financial harm related to crypto based securities in your brokerage accounts, it is possible those assets were not in your best interest. You can consult with a Crypto-Securities law firm, like Malecki Law in New York, about the representations regarding investment recommendations made by your advisor as well as the losses your account had, to determine if you have a viable claim.
FIT 21 seems to be the federal government’s response to the gray area and confusion surrounding crypto regulation as crypto becomes more prominent in Americans’ lives. While the bill has been passed by the House, it still needs to be voted on in the Senate. It will be interesting to see where this bill goes, as it might just be the right step toward clarity and regulation in the crypto space.
Contributions by Jacqueline N. Candella, Associate at Malecki Law