#Introduction

21:00-7:00 Key words: Chairman of the US SEC, USDC, Coinbase, Gemini

Overview of important developments overnight on March 30th

In recent times, there has been a lot of buzz around the 21:00-7:00 rule set by the Chairman of the US Securities and Exchange Commission (SEC) regarding the trading of digital assets. The rule has raised concerns among many investors who worry about the impact it may have on the crypto exchange platforms such as Coinbase and Gemini. This article seeks to provide readers with valuable insights on what the 21:00-7:00 rule is all about, and how it affects digital asset trading.
#Outline
1. Understanding the 21:00-7:00 rule
2. What led to the adoption of the 21:00-7:00 rule by the SEC?
3. How does the 21:00-7:00 rule affect digital asset trading?
4. The impact of the 21:00-7:00 rule on Coinbase and Gemini
5. Conclusion
6. FAQs
#Understanding the 21:00-7:00 rule
On December 21st, 2021, Gary Gensler, the Chairman of the US Securities and Exchange Commission (SEC), issued a new rule that set a trading cutoff time for digital assets. The rule states that digital asset exchanges must stop trading USDC and stablecoin derivatives from 21:00 to 7:00 Eastern Time every day. The rule intends to provide stability and prevent market manipulation or insider trading in the digital asset market, given the notorious volatility and risks associated with digital assets.
#What led to the adoption of the 21:00-7:00 rule by the SEC?
The SEC has been wary of the risks posed by digital assets, especially regarding market manipulation, insider trading, and fraud. Since the inception of the crypto market, regulators have struggled to develop frameworks and regulations that balance innovation and investor protection. The SEC has shown intent to regulate the crypto market in recent times, highlighted by the Commissioner’s public calls for more regulations. The timing and adoption of the 21:00-7:00 rule are part of the SEC’s broader efforts to regulate the digital asset industry better.
#How does the 21:00-7:00 rule affect digital asset trading?
The 21:00-7:00 rule affects digital asset exchanges such as Coinbase and Gemini, which have to abide by the regulation. The rule only affects USDC and stablecoin derivatives trading, while other digital assets such as Bitcoin and Ethereum are exempted. However, USDC and stablecoin derivatives account for a major portion of the digital asset trading volume, and their suspension during the 21:00-7:00 period affects the overall liquidity of the crypto market. The rule also impacts active traders who use trading bots that rely on market volatility at night.
#The impact of the 21:00-7:00 rule on Coinbase and Gemini
Coinbase and Gemini are two of the most prominent digital asset exchanges in the US, with a massive customer base. The 21:00-7:00 rule affects their business model, given that they cannot trade USDC and stablecoin derivatives during the specified period. Coinbase’s CEO, Brian Armstrong, criticized the rule, stating that it favored large institutional investors at the expense of retail investors. Gemini’s CEO, Tyler Winklevoss, said that the regulation was necessary, but more efforts should focus on enforcing existing regulations.
#Conclusion
The 21:00-7:00 rule set by the Chairman of the US Securities and Exchange Commission (SEC) is a significant development in the digital asset industry. The rule intends to provide stability and prevent market manipulation or insider trading in the digital asset market. However, the rule also impacts digital asset traders, exchanges such as Coinbase and Gemini, and the overall liquidity of the crypto market. The SEC’s adoption of the 21:00-7:00 rule highlights the regulatory challenges and opportunities in the digital asset industry.
#FAQs
1. How does the 21:00-7:00 rule apply to international digital asset exchanges?
The rule only applies to digital asset exchanges operating in the US jurisdiction.
2. What will be the impact of the 21:00-7:00 rule on digital asset prices?
The rule may limit the volatility and prices of some digital assets, given the suspension of USDC and stablecoin derivatives trading.
3. Is the 21:00-7:00 rule permanent?
The rule is subject to change depending on market dynamics and regulatory developments.
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