Regulation
In its de facto war on crypto, regulatory rulemaking is not the SEC’s priority
Gary Gensler once described the Securities and Exchange Commission’s (SEC) role in policing the “Wild West” crypto industry as a “cop on the ground.”
Although anecdotal, what has since followed has been a series of high-profile civil lawsuits against some of the biggest players in the industry. Yet a statement like this would only be true if the SEC actually adhered to its own rules-based standards.
It is no secret that the SECOND, which aims to subject crypto to stricter scrutiny from the government as its primary overseer, continues to drag its feet in refusing to adapt the rules to clarify oversight of the multi-billion dollar crypto sector. But it’s not just that the SEC refused to write new regulations On how digital assets should be treated, the agency has instead focused, solely and miserably, on coercive measures that have turned courts into “enforcement chambers,” as the academic noted JW Verret.
Gensler, who is chairman of the SEC, has previously stated that most digital assets are “crypto asset securities” although there are no crypto-specific regulations stipulating this. Meanwhile, the SEC requires crypto companies to comply with evolving securities law requirements.
Challenges faced by crypto companies
In fact, the SEC has never issued a single regulatory guidance related to the registration of digital assets. In the dry land of crypto regulatory ambiguity, crypto companies like BlockFi be prosecuted for failing to register when he did not know how to “comply” in the first instance.
Gensler has stated publicly that Bitcoin (BTC) is not a security, but he implied that Ethereum (ETH)
could be a security and has repeatedly argued that hundreds of smaller tokens should fall under the jurisdiction of the SEC, which would mean companies that issue such cryptocurrencies would have to register with US government authorities.
Defining crypto as a security
In addition to refusing to take the necessary rules to establish stable regulatory standards for crypto, the SEC is unwilling to formally define what makes a crypto a security outside of the explanations provided by the agency in its enforcement measures.
To be sure, the SEC has said it is in the process of developing compelling crypto policies, as evidenced by proposals such as those seeking to revise the definition of exchanges to require investment advisors to use custodians qualified to park their clients’ crypto. However, if the SEC spent as much time clarifying crypto-specific rules (as many in the industry have urged it to do) as it does taking crypto companies to court, we might have more answers .
But crafting crypto regulatory rules is not the SEC’s priority, and providing clear answers that would ease the legal quagmire that many are also unable to provide. crypto companies stay in.
Balancing application and orientation
Gensler’s view is that existing securities laws are sufficiently clear because the SEC’s actions already apply to crypto – a convenient but flawed argument that negates the need for new rules. What else, Gensler (who even once taught at an MIT
blockchain lecture course and has historically flip-flopped on his views) said that while malpractice is rampant in the crypto industry, crypto represents only a small portion of the U.S. capital markets.
If indeed crypto is too small an industry to exist on the SEC’s direct radar, why has this seemingly inconsequential sector attracted so much attention from the agency, leading to controversial billion-dollar sanctions? dollars for crypto companies like Ripple? How does continuing a punitive campaign against crypto contribute to the issuance of clear guidance on fundamental issues impacting the industry?
Global Trends in Crypto Regulation
Hundreds of millions of people around the world use crypto for various purposes and believe in its potential. The SEC’s failure to see how crypto is inevitably a part of our future means that at the federal regulatory level, the United States may be lagging behind the rest of the world. EU, UK, United Arab Emirates, Japan, Singapore and even China have introduced or are in the process of introducing permanent regulatory frameworks for crypto – take note of the SEC. U.S. policymakers should consider launching a Sandbox too, just like the UK did.
I often find myself thinking about the age-old dating question: “Where do we go from here?” “. No, but really. How can the crypto industry continue to progress without a clear regulatory path? The stakes are too high, especially as crypto becomes more and more integrated into the global financial system. “Protecting investors and strengthening public confidence in our markets requires that we work with a sense of urgency,” Gurbir Grewal, director of the SEC’s enforcement division, once remarked. I just wish this sense of urgency would be applied to the formation of much-needed crypto regulatory guidelines.
Gary Gensler once described the Securities and Exchange Commission’s (SEC) role in policing the “Wild West” crypto industry as a “cop on the ground.”
Although anecdotal, what has since followed has been a series of high-profile civil lawsuits against some of the biggest players in the industry. Yet a statement like this would only be true if the SEC actually adhered to its own rules-based standards.
It is no secret that the SECOND, which aims to subject crypto to stricter scrutiny from the government as its primary overseer, continues to drag its feet in refusing to adapt the rules to clarify oversight of the multi-billion dollar crypto sector. But it’s not just that the SEC refused to write new regulations On how digital assets should be treated, the agency has instead focused, solely and miserably, on coercive measures that have turned courts into “enforcement chambers,” as the academic noted JW Verret.
Gensler, who is chairman of the SEC, has previously stated that most digital assets are “crypto asset securities” although there are no crypto-specific regulations stipulating this. Meanwhile, the SEC requires crypto companies to comply with evolving securities law requirements.
Challenges faced by crypto companies
In fact, the SEC has never issued a single regulatory guidance related to the registration of digital assets. In the dry land of crypto regulatory ambiguity, crypto companies like BlockFi be prosecuted for failing to register when he did not know how to “comply” in the first instance.
Gensler has stated publicly that Bitcoin (BTC) is not a security, but he suggested that Ethereum (ETH)
could be a security and has repeatedly argued that hundreds of smaller tokens should fall under the jurisdiction of the SEC, which would mean companies that issue such cryptocurrencies would have to register with US government authorities.
Defining crypto as a security
In addition to refusing to take the necessary rules to establish stable regulatory standards for crypto, the SEC is unwilling to formally define what makes a crypto a security outside of the explanations provided by the agency in its enforcement measures.
To be sure, the SEC has said it is in the process of developing compelling crypto policies, as evidenced by proposals such as those seeking to revise the definition of exchanges to require investment advisors to use custodians qualified to park their clients’ crypto. However, if the SEC spent as much time clarifying crypto-specific rules (as many in the industry have urged it to do) as it does taking crypto companies to court, we might have more answers .
But crafting crypto regulatory rules is not the SEC’s priority, and providing clear answers that would ease the legal quagmire that many are also unable to provide. crypto companies stay in.
Balancing application and orientation
Gensler’s view is that existing securities laws are sufficiently clear because the SEC’s actions already apply to crypto – a convenient but flawed argument that negates the need for new rules. What else, Gensler (who even once taught at an MIT
blockchain lecture course and has historically flip-flopped on his views) said that while malpractice is rampant in the crypto industry, crypto represents only a small portion of the U.S. capital markets.
If indeed crypto is too small an industry to exist on the SEC’s direct radar, why has this seemingly inconsequential sector attracted so much attention from the agency, leading to controversial billion-dollar sanctions? dollars for crypto companies like Ripple? How does continuing a punitive campaign against crypto contribute to the issuance of clear guidance on fundamental issues impacting the industry?
Global Trends in Crypto Regulation
Hundreds of millions of people around the world use crypto for various purposes and believe in its potential. The SEC’s failure to see how crypto is inevitably a part of our future means that at the federal regulatory level, the United States may be lagging behind the rest of the world. EU, UK, United Arab Emirates, Japan, Singapore and even China have introduced or are in the process of introducing permanent regulatory frameworks for crypto – take note of the SEC. U.S. policymakers should consider launching a Sandbox too, just like the UK did.
I often find myself thinking about the age-old dating question: “Where do we go from here?” “. No, but really. How can the crypto industry continue to progress without a clear regulatory path? The stakes are too high, especially as crypto becomes more and more integrated into the global financial system. “Protecting investors and strengthening public confidence in our markets requires that we work with a sense of urgency,” Gurbir Grewal, director of the SEC’s enforcement division, once remarked. I just wish this sense of urgency would be applied to the formation of much-needed crypto regulatory guidelines.