Will the crash of UST
bring over-regulation to
Crypto & Kill Bitcoin?
LCXwire has released a potentially controversial article "Stablecoin UST & Luna Coin
Crash Threatens To Destroy Bitcoin & Crypto, Regulators May Seize Opportunity To
Create Massive Regulation", bringing some cause for concern, as the article may upset
some crypto investors.
The 1,400 word article examines the high and low
points of the Crypto Market crash, how the crash
threatens excessive regulation by regulators, and
provides a quick, broad overview of the impact of a
stablecoin crash on the long-term outlook for
investors wanting to sell or buy crypto.
In a typical manner, a certain element of the article is set to spark
discontent amongst some cryptocurrency investors.
This portion of the article exemplifies the
controversial element: Treasury Secretary
Janet Yellen expressed concern about the
troubles with UST, a stablecoin that has
lost its dollar peg in recent days.
Secretary Yellen said UST had “experienced a run” at a
Senate Banking Committee hearing Tuesday.
She emphasized that stablecoins
have come under increasing scrutiny
by regulators because of their growth
and potential to cause a systemic
risk to the financial system.
Further, SEC Chairman Gary Gensler said Tuesday crypto exchanges
are sidestepping rules and may be “trading against their clients” in an
interview with Bloomberg.
According to Gensler, many of the largest
cryptocurrency exchanges don’t separate their
custody, market-making, and trading services
like traditional exchanges do. The “commingling”
of services could be problematic for clients’
interests, he says.
Although TerraUSD maintains its tie to the dollar through an algorithm, investor runs on
stablecoins that maintain reserves in assets like cash or commercial paper could spill over
into the traditional financial system, causing stress in those underlying asset classes, say
In March, for example, the Acting
Comptroller of the Currency warned that
banks could be tripped up by crypto
derivatives and u