Crypto Regulatory Initiatives Show SEC’s Dominance Among US Regulators: JPMorgan

JPMorgan foresees more regulatory actions on stablecoin issuers, custody and protection of investors’ digital assets and on the unbundling of crypto services, the report said.

AccessTimeIconFeb 23, 2023 at 12:02 p.m. UTC
Updated Feb 23, 2023 at 5:21 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Recent regulatory initiatives have shown the Securities and Exchange Commission’s (SEC) dominant position in the U.S. in regulating the digital assets space, JPMorgan said in a research report last week.

Its actions have also shown the SEC’s bias in viewing most crypto, with maybe bitcoin (BTC) as the only exception, as securities, the report said. It noted that SEC Chair Gary Gensler started pushing back against implementing special rules for the crypto industry in September, arguing that most cryptocurrencies should be classed as securities and thus be regulated under existing securities laws.

“Given the above it should not come as a surprise that the SEC looks at the offering of a staking service as being similar to offering any other type of security,” the note said. This opens the way for other firms offering staking services to have to be registered as a securities platform with the SEC, the report added.

The bank predicted more regulatory actions on stablecoin issuers, custody and protection of investors’ digital assets, and on the unbundling of broker/trader/lending/clearing/custody activities.

It also expects mandated regular disclosure, reporting and auditing of reserves, assets and liabilities across major crypto entities, analysts led by Nikolaos Panigirtzoglou wrote. These regulations will lead to “convergence of the crypto ecosystem towards the traditional financial system over time,” he added.

“Staking business should shift more towards direct staking for institutional investors and more towards decentralized (DeFi staking) alternatives for retail investors,” the note said. DeFi is an umbrella term for a variety of financial applications carried out on a blockchain.

Ether (ETH) will likely see additional selling pressure on Ethereum following the forthcoming Shanghai upgrade, as crypto exchange Kraken has 1.2 million ETH staked on the network, a significant amount of which is owned by its U.S. clients. Adding the 1 million ether from staking rewards that could be withdrawn immediately after the upgrade, the downside risk to ether becomes even more significant, the note added.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Author placeholder image

Will Canny is CoinDesk's finance reporter.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.

Read more about