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Brian Quintenz, Caroline Pham, CFTC, Coinbase, Crypto regulation, Gary Gensler, insider trading, pat toomey, regulation by enforcement, SEC, sec v wahi, Securities, Security Tokens, tom emmer, US congressman, US senator
SEC Criticized for How It Regulates Crypto – Chairman Gensler Says Most Crypto Tokens ‘Have Securities Attributes’ – Regulation Bitcoin News
The US 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 criticized for regulation by enforcement
The US 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 issued a statement on the matter on Thursday. She wrote:
The SEC v. Wahi case 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 associated with decentralized autonomous organizations (DAOs), are securities,” she said.
Former CFTC Commissioner Brian Quintenz agreed with Pham, tweeting:
Regulation by enforcement, threats, influence, PR or other means beyond the APA regulations is completely inappropriate. Always.
The Administrative Procedure Act (APA) applies to all agencies of the federal
The authorities. It provides the general procedures for different types of regulations.
Quintenz said last August that “the SEC has no authority over pure commodities or their trading venues, whether those commodities are wheat, gold, oil….or cryptoassets.”
U.S. Senator Pat Toomey (R-PA) also shared his opinion on the SEC v. Wahi case. He tweeted on Friday: “Yesterday’s enforcement action is the perfect example of the SEC having a clear opinion on how and why certain tokens are classified as securities. Yet the SEC failed to disclose their views before initiating an enforcement action.”
SEC Chairman Gary Gensler shared his opinion on cryptocurrency regulation in an interview with CNBC on Thursday. “I am neutral about the technology, but I am not about the investor protection. This is a highly speculative asset class,” he emphasized, elaborating:
There are thousands of tokens, most of which have security attributes.
Gensler warned, “Just like any field in 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 exposure, understand the risks. There is very significant risk in this field .”
Last week, US Congressman Tom Emmer also criticized the SEC for “cracking down on companies outside their jurisdiction”. He argued: “Under Chairman Gensler, the SEC has become a power-hungry regulator, politicizing enforcement, luring companies to ‘come in and talk’ with the commission, then hitting them with enforcement actions, discouraging good faith cooperation.”
What do you think about how the SEC regulates the crypto sector? Let us know in the comments section below.
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