Policy, Nasdaq, Regulation, U.S. Securities and Exchange Commission, Hester Peirce, News A extremely particular taxonomy is required for the U.S. to maneuver ahead with crypto regulation, the corporate argued in a letter to the company. 

Nasdaq, the operator of one of many premier U.S. inventory exchanges and a crypto index, is advising the U.S. regulators to rigorously deal with defining digital belongings in 4 buckets that may clearly decide which company acts as referee, in line with a 23-page letter despatched to the Securities and Exchange Commission’s crypto process drive.

“While a stock by any other word would still be a stock, the existing market ecosystem can readily absorb digital assets by establishing the proper taxonomy and calibrating certain rules to reflect what is truly new and novel about digital assets,” the letter argued in response to the invitation issued by the task force’s chief, Commissioner Hester Peirce, to weigh in on future rules.

The 4 future classes of digital belongings, in Nasdaq’s view, ought to be:

• monetary securities (tokens tied to belongings which might be securities below current definitions, like shares, bonds and exchange-traded funds (ETFS), which Nasdaq stated ought to be handled simply the identical as their underlying belongings);
• digital asset funding contracts (tokenized contracts that test all of the securities packing containers below a “clarified version” of the Supreme Court’s so-called Howey take a look at);
• digital asset commodities (assembly the U.S. definition of commodities)
• different digital belongings (stuff that does not fall anyplace else and should not have guidelines for securities or commodities imposed on it)

The securities classes belong within the palms of the SEC, which might be working with its cousin company, the Commodity Futures Trading Commission, that may deal with the commodities. Those businesses — presumably directed in some unspecified time in the future by a brand new crypto legislation hatched by Congress — will determine the exact border between their jurisdictions.

The letter, signed by John Zecca, the corporate’s chief regulator govt, argued that “digital assets that constitute financial securities must trade as they do today.”

Nasdaq additionally prompt that the 2 businesses ought to formulate a type of crossover buying and selling designation for platforms that may deal with digital asset funding contracts, commodities and different sorts of belongings below one roof.

In the letter, Nasdaq underlined its digital-asset credibility, saying its “trading and clearing services, market and trading surveillance, and central securities depository technology support digital assets platforms on six continents.” It contended that the regulators ought to take into account imposing security measures or additional constraints on corporations that wish to deal with buyers’ exercise from prime to backside, which is the frequent strategy of current crypto corporations.

Read More: SEC ‘Earnest’ About Finding Workable Crypto Policy, Commissioners Say at Roundtable

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