With the recent crypto regulation trend in the United States, pro-crypto lawmaker Senator Cynthia Lummis is committing to championing more favorable rules ahead.
Pushing Self-Custody Crypto Regulation
Many crypto leaders have slammed the lack of regulatory clarity in the US, a trend lawmakers like Cynthia Lummis hope will change soon. In her latest comment on the social media platform X, the Senator appears ready to challenge the “Not your keys not your coins concept.”
This is a concept that generally discourages centralized custody of crypto assets. This advocacy against this concept became popular after the bankruptcy declaration of FTX Derivatives Exchange. With billions in user’s assets locked up in bankruptcy proceedings, crypto activists began advocating for self-custody.
With lagging regulation in the industry, digital currency trading platforms innovated to prevent bank run on their deposits. Pioneered by Binance Exchange, these trading platforms started releasing verifiable Proof-of-Reserves (PoR). This PoR report has now become a tradition and is published monthly. It shows the ratio between users’ balances and the trading platform’s asset to meet the demands.
This method is still largely based on the exchange’s discretion. In Senator Lummis’ comment,
“I will fight to protect every American’s right to self-custody their own private keys. Property rights are fundamental to decentralization and censorship resistance.”
Not your keys, not your coins. 🔑
I will fight to protect every American’s right to self-custody their own private keys.
Property rights are fundamental to decentralization and censorship resistance.
— Senator Cynthia Lummis (@SenLummis) May 25, 2024
It remains uncertain whether she will sponsor a Bill at the Senate or play a role in pressing for more clarity with the United States Securities and Exchange Commission (SEC) in this regard. In all, Senator Lummis is championing a trend in Congress to build a new pro-crypto army.
America Is Gradually Pivoting
While the conversations around crypto regulation remains volatile, the terrain is changing for the better. In January, the SEC greenlighted spot Bitcoin ETF products for trading. This approval marked an end to the more than 10-year wait for the product from the same regulator.
Despite the conversation around the categorization of Ethereum as a security, the SEC made a complete turnaround earlier this week. The turnaround came with the approval of 8 spot Ethereum ETF products, a monumental achievement for the industry.
With the progress made thus far, fueling a self-custodial crypto regulation might soon be a reality in the long run.
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