The EU passed landmark cryptocurrency regulation as market volatility continues, and it covers crypto exchanges and stablecoin holders. Lawmakers in the U.S. have yet to pass their own bill, but several bipartisan proposals are floating around. How will the EU's regulation impact the crypto industry, and potentially push the U.S. to implement regulations? Gordon Allott, founder & President of BroadPeak Partners, joins Closing Bell to discuss. 

Closing Bell

EU Passes Landmark Crypto Regulation as U.S. Lawmakers Propose Bipartisan Framework

well as the crypto market remains under pressure, calls for regulations seem more sensical and the european union did just that this week. The markets in crypto assets law will make things tougher for crypto exchanges and stable coin issuers. And it does give authority to the european securities and markets authority to step in to ban or restrict crypto platforms that aren't properly protecting investors. Well, does this new regulation mean big change And what could it look like here in the US if it makes its way here joining me now, is Gordon Allen, founder and president of Broad Peak Partners. That's a regulatory at technology for digital assets in virtual currency company. Gordon? It's good to see you. So how big is this? Use regulatory framework? And what sort of difference could it mean for investors? It's good to see you. That's great. Thank you for having me. It's really big piece of legislation. We didn't think that. I mean, mike has been hanging around for a couple of years and we, you know, I think that nobody quite expected it to advance in the EU parliament, which it did. Um, it's not final yet. It still has to be ratified by the constituent states. But uh, it's a very comprehensive piece of legislation touching really, almost every piece of the digital asset marketplace. So here's the question, do you think it can be effective because unfortunately we've heard of a lot of people as this crypto market has turned south losing money in crypto whether it's actual tokens themselves, like Bitcoin for instance or some of the defi space. It's certainly been a rough six months. It's been a very rough six months? And, and this legislation has some, what I would say, some, some major gouaches in it. Um, and particularly around the stable coin space. Uh, so, you know, for for example, I mean, we're all familiar with the terror collapse. Um, and you know, what might happen under a piece of legislation like Mica. And the thing is, is that if you had bought terra under this legislation through an intermediary through finance or through coin base or someone else, then if the assets of the stable coin ran out, then actually those firms would have to cover the shortfall. So that will have a massive chilling effect on stable coins in europe. Uh, and really, that's just one very small piece of of the legislation. There's also, uh, parts that enable firms to or enable people to litigate for losses in the case of fraud, Uh, cryptocurrencies and digital assets. Generally they're going to have to put out a what they're calling a white paper. But it's really a type of an S one. And to the extent that, you know, a rug fall happens or there's fraud involved, then it's really going to end up with a large number of lawsuits. One other quick question. Gordon before we have to let you go because we're a bit tight on time. What might this mean for us regulation when it comes to Cryptocurrency. Very interesting. So there are seven pieces of legislation currently before Congress, the most recent. It's the Loomis Gillibrand and you know, the big fight that's happening right now is is who's going to get jurisdiction? Is it going to end up under the Cftc? Is it going to end up under the sec? Uh And I think that, you know right now, the direction that that we're taking and that we're expecting is that most crypto will end up under the Cftc and that stable coins and more exotic type coins will end up under the sec. But that's our that's our current expectation. Alright. Gordon Allen, founder and president of Broad Peak Partners. Gordon? Thanks so much for taking the time on this friday.