The U.S. Securities and Exchange Commission has been a thorn in crypto's side for some time and one of its commissioners did not hold back on how that's hurt the overall cryptocurrency industry.
"I think our policies and our approach over the last several years have been just really a disaster for the whole industry," Republican SEC Commissioner Mark Uyeda said Wednesday on the Fox Business show "Mornings with Maria." "We have been sending this 'policy through enforcement,' we've done nothing to provide guidance on it and as a result, this has been achieved by the courts. And different courts have ruled different ways."
Uyeda joined the show one day after Crypto.com sued the SEC after receiving a Wells notice. The crypto trading platform said its lawsuit asserts the SEC has overexpanded its jurisdiction while also pushing back on the agency’s claim that most cryptocurrencies are securities. The SEC has had longstanding legal sagas with the likes of Coinbase and Ripple, among others.
SEC Chairman Gary Gensler has faced sharp criticism from crypto industry leaders for his regulatory stance on digital assets. Gensler maintains that most cryptocurrencies should be classified as securities and has urged crypto platforms to register with the regulator. However, crypto firms argue that complying with SEC registration is impractical under the current rules, claiming the regulatory framework is ill-suited for digital assets.
"[W]hat has gone on is part of a broader frustration with the fact that we have not provided interpretive guidance as to what you can and cannot do and if you are involved in some sort of securities offering, how you register, how you get regulated as a broker-dealer, how you get registered as an exchange," Uyeda said.
When asked what the SEC could or should do differently, Uyeda said the "need to lay out some clear guidance and interpretations on what exactly falls within and falls outside of the securities laws."
"You can't even start to have a discussion unless you know what's in and what's out," he said Wednesday. "And then from there, to the extent they are within our realm, we need to think about, alright, how does the broker handle these securities?"
Coincidentally, on Wednesday, law students grilled Gensler and a former Democratic commissioner over his views on regulating crypto during a fireside chat at the New York University Law Institute for Corporate Governance and Finance.
The SEC's leadership is made up of five presidentially appointed commissioners based on advice and consent from the Senate. There can't be more than three commissioners from the same political party.
During the Bitcoin 2024 conference in July, former President Donald Trump said he would fire Gensler, which drew rabid applause from the audience. Robinhood Chief Legal Officer Dan Gallagher is a contender to be SEC chair if Trump wins November's election, according to Politico.
"The new chairman coming in would be able to take a fresh look at every rule, including ones that affect the crypto industry and the ones that are out in the comment period," former Republican SEC Commissioner Michael Piwowar told The Block last month, "and decide whether or not to move forward with certain rulemaking, but would need commissioners' votes."
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
