Though Okcoin chief compliance officer Megan Monroe said that at that place are notwithstanding certain gray areas over cryptocurrencies in the U.s.a., farther regulation may not be the best solution.

In a statement to Cointelegraph, Monroe said electric current U.S. regulations are sufficient to police cryptocurrency exchanges, token issuers and custody wallet providers, simply "jurisdictional boundaries of these federal financial regulators are neither articulate nor collaborative." Rather, she advocated for a framework with greater clarity to determine which crypto firms should be subject to regulation and let investors know which protections are available.

"A clear regulatory framework with established jurisdictional boundaries, flexible compliance standards and open up communication channels with registrants (as well equally with state regulators) would be a proficient manner to initiate an evolving framework for market place participants to abound their businesses," said the Okcoin primary compliance officer. "[This] would provide retail customers that seek to work with regulated entities a clearer understanding of the investor protections that would exist available to them."

She added:

"We practice not believe that further regulation volition necessarily prevent fraud and platform abuse [...] Fraud should not be express to focusing on retail customer regulatory compliance issues in the securities markets."

Two of the major government agencies handling digital asset regulation in the United States, the Securities and Exchange Committee, or SEC, and the Commodity Futures Trading Commission, or CFTC, have different jurisdictional claims regarding crypto.

The SEC oft determines whether tokens are securities using the Howey Test, with Chairperson Gary Gensler arguing the crypto industry, including decentralized exchanges, falls within the regulatory purview of the federal agency. Former CFTC chair Christopher Giancarlo has claimed that cryptocurrencies are commodities and thus would be subject to regulation past the government body. However, CFTC commissioner Dawn Stump told Cointelegraph "the CFTC does not regulate commodities, and thus it does not regulate crypto assets even if they are commodities."

The apparent lack of clarity can be seemingly confusing to crypto firms that are because relocating to the U.Due south., or local ones making the transition to the digital space. David Schwartz, primary technology officer of Ripple Labs, told Cointelegraph earlier this year that it was "hard to effigy out which laws apply and how they apply to something new," like cryptocurrencies or blockchain engineering science.

"Over time, the regulators have educated themselves about the industry and expanded their scope to contain new blockchain technology, such as decentralized exchanges and DApps," said Monroe. "Merely, the regulations nonetheless lag backside the industry innovation, which is why the regulators accept notwithstanding to provide comprehensive regulatory guidance on decentralized finance technology."

Related: Will regulation adjust to crypto, or crypto to regulation? Experts answer

The Okcoin chief compliance officer said that an "incubator" arroyo might be i possible solution to this "patchwork of fiscal regulations," wherein crypto traders and businesses could operate without fearfulness of legal action for a set period of time. She too encouraged projects to clearly identify the risks to both investors and users, and for greater communication and collaboration between agencies like the CFTC, SEC and Financial Crimes Enforcement Network.