Former SEC senior counsel Howard Fischer commented that the move by several U.S. states to open investigations into crypto lender Celsius Network’s recent freeze on withdrawals will ultimately lead to further regulation and oversight at the federal level.
“What you’re going to see is what I like to consider a return to normalcy. Institutions that deal in crypto are going to be regulated as if they were more standard financial institutions.”Howard Fischer
Fischer, now a partner at the New York-based law firm Moses & Singer, said that now after the Celsius debacle, the SEC will look carefully at market integrity, investor protection and transparency.
He further said that the problem at Celsius is “an issue that goes well beyond one company.” According to him, this is a problem for the entire crypto industry, “especially crypto lending.”
Further regulations will require crypto platforms to report their assets and liabilities, and run and report their risk scenarios, Fischer said.
“Basically, [they’ll] provide a level of disclosure not only to participants in markets, but to regulators that they haven’t been producing, and perhaps, are not expected to produce now… Whether or not there are investors, shareholders or account holders who didn’t fully understand what the risks were, what the potential liabilities were and what the potential loss scenarios could possibly be.”Howard Fischer
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