The SEC considers most cryptocurrencies as unregistered securities and should be regulated under securities laws. Securities are financial products that have existed for hundreds of years, while cryptocurrencies have only been around for a decade or so. An emerging asset class should be regulated in a new way, rather than being categorised as securities.
In fact, the new EU regulatory framework for the crypto sector, MiCA, makes it clear that existing securities laws do not cover the new asset class of cryptocurrencies, hence the need for an entirely new law, MiCA - Market in Crypto Asset Regulation.
Patrick Hansen, Circle's Director of EU Policy and Strategy, explains the MiCA:
"One of MiCA's key drivers was the recognition that most crypto-assets are not covered by existing EU securities regulation. Therefore, a specific regulation at the EU level was needed. Enter MiCA.
Already back in 2019, the main EU supervisory authorities EBA and ESMA constituted that "typically, crypto-asset activities do not constitute regulated services within the scope of EU banking, payments and electronic money law, and risks exist for consumers that are not addressed at the EU level."
This assessment has even been integrated into EU laws already in application such as the DLT pilot regime that notes that "the majority of crypto-assets fall outside of the scope of EU legislation and raise, among others, challenges in terms of investor protection, market integrity and financial stability. They therefore require a dedicated regime at Union level."
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