As the cryptocurrency market continues to evolve, the U.S. Securities and Exchange Commission (SEC) has acknowledged a flawed approach to the sector. SEC Commissioner Mark Uyeda recently discussed the agency’s handling of cryptocurrency on the program “Mornings with Maria,” commenting that their policies have been detrimental to the industry. Uyeda criticized the SEC’s reliance on “policy through enforcement” without offering clear guidance, leading to inconsistent court rulings.
In related news, Crypto.com has initiated legal action against the SEC, accusing the agency of overreaching its jurisdiction by treating crypto tokens as securities. This move follows the issuance of a “Wells notice” to the platform, indicating potential enforcement actions. Crypto.com argues that the SEC has unlawfully broadened its authority and deems almost all crypto asset transactions as securities trades.
Commissioner Uyeda expressed his concern regarding the lack of interpretative guidance from the SEC on securities offerings, broker-dealer regulations, and exchange registrations, abstaining from commenting on the specifics of the ongoing litigation.
The lawsuit by Crypto.com comes four months after Coinbase pursued legal measures against the SEC and the Federal Deposit Insurance Corporation (FDIC), seeking transparency in the agencies’ crypto regulatory approaches. Coinbase contends that financial regulators are intentionally blocking crypto firms from accessing the federal banking system.
Uyeda remarked that advocacy from pro-crypto entities focuses on non-material issues and is seemingly an attempt to drive social change through financial regulations rather than legislative processes. He emphasized the need for the SEC to provide explicit guidance regarding the scope of securities laws in relation to cryptocurrency, to facilitate discussions on regulatory responsibilities for brokers.
Recently, top House Republicans addressed a letter to SEC Chairman Gary Gensler, expressing concern over the SEC’s classification of certain “airdrops” as unregistered securities, which they consider a regulatory overreach.
