SEC Criticized for How It Regulates Crypto — Chair Gensler Says Most Crypto Tokens ‘Have Attributes of Securities’

SEC Criticized for How It Regulates Crypto — Chair Gensler Says Most Crypto Tokens 'Have Attributes of Securities'

The U.S. Securities and Exchange Commission (SEC) has been heavily criticized for its approach to regulating the crypto sector. The criticism followed the securities regulator’s action against a former Coinbase employee in an insider trading case, in which the SEC named nine crypto tokens listed on Coinbase as securities.

SEC Slammed for Regulation by Enforcement

The U.S. Securities and Exchange Commission (SEC) has been heavily criticized for taking an enforcement approach to regulating the crypto sector after the regulator charged a former Coinbase employee in an insider trading case. In its complaint, the SEC stated that nine crypto tokens listed on Coinbase are securities, a finding immediately disputed by the Nasdaq-listed crypto exchange.

Commodity Futures Trading Commission (CFTC) Commissioner Caroline D. Pham released a statement about the case Thursday. She wrote:

The case SEC v. Wahi is a striking example of ‘regulation by enforcement.’

“The SEC complaint alleges that dozens of digital assets, including those that could be described as utility tokens and/or certain tokens relating to decentralized autonomous organizations (DAOs), are securities,” she said.

Former CFTC Commissioner Brian Quintenz concurred with Pham, tweeting:

Regulation by enforcement, threats, leverage, PR, or any other means beyond the APA rulemaking process is wholly inappropriate. Always.

The Administrative Procedure Act (APA) applies to all agencies of the federal
government. It provides the general procedures for various types of rulemaking.

Quintenz said in August last year that “the SEC has no authority over pure commodities or their trading venues, whether those commodities are wheat, gold, oil …. or crypto assets.”

U.S. Senator Pat Toomey (R-PA) also shared his opinion on the SEC v. Wahi case. He tweeted Friday: “Yesterday’s enforcement action is the perfect example of the SEC having a clear opinion on how and why certain tokens classify as securities. Yet the SEC failed to disclose their view before launching an enforcement action.”

SEC Chairman Gary Gensler shared his opinion on cryptocurrency regulation in an interview with CNBC Thursday. “I’m neutral about the technology but I’m not about the investor protection. These are a highly speculative asset class,” he emphasized, elaborating:

There are thousands of tokens, most of which have attributes of securities.

Gensler warned: “Just like any field of venture capital and new projects, many projects fail. You look at the statistics, in fact, most new ventures fail, and it’s important that the public get the disclosure, understand the risk. There’s very significant risk in this field.”

Last week, U.S. Congressman Tom Emmer also slammed the SEC for “cracking down on companies outside its jurisdiction.” He asserted: “Under Chair Gensler, the SEC has become a power-hungry regulator, politicizing enforcement, baiting companies to ‘come in and talk’ to the Commission, then hitting them with enforcement actions, discouraging good-faith cooperation.”

What do you think about how the SEC is regulating the crypto sector? Let us know in the comments section below.

Earning Passive Income With Crypto

Related Posts

Has the U.S. Dollar Index (DXY) Completed Its Uptrend?

After months of upward movement, the U.S. dollar index (DXY) may have peaked and initiated a downtrend. In early August, the DXY broke down from its long-term,…

20000% in One Minute on Play to Earn Game Tothesmart

PRESS RELEASE. The crypto enthusiast has got 10,032 BUSD into their wallet by buying virtual miners in the Play To Earn game Tothesmart for only 50 BUSD….

Ethereum’s Goerli Testnet Implements The Merge, ETH Price Jumps 74% Higher During the Past 30 Days

The Merge has successfully been implemented into Ethereum’s third and final testnet, Goerli, after previously adding Merge support to the testnets Sepolia and Ropsten. The Merge was…

Arsenal Loses Appeal Over Misleading Crypto Advertising

Premier League giants Arsenal F.C. have lost an appeal and been given a second warning by the U.K.’s Advertising Standards Authority (ASA) over the “misleading” marketing of…

Medieval Empires: Ertugrul To Ease Entry Into Web3 Gaming

In light of blockchain gaming’s advancement into the mainstream gaming industry, Medieval Empires: Ertugrul’s founding team attended the Blockchain Economy Istanbul Summit, the biggest blockchain event in…

Biggest Movers: ATOM Climbs to Highest Point Since May, While SOL Rises by Over 10%

Cosmos rose to its highest point since May earlier in today’s session, as crypto markets surged on Thursday. The global market cap is trading over 6.27% higher…