The US Securities and Exchange Commission (SEC) has faced increasing criticism in recent years over its regulatory approach to the crypto industry under President Biden’s administration, characterized by increased enforcement actions and lawsuits against major players.
Commissioner Mark Uyeda recently voiced his concerns, describing the SEC’s strategy and regulation of the nascent crypto market as a “disaster for the entire industry” in an interview with FOX Business.
Uyeda Critiques SEC’s Enforcement-Driven Policies
Uyeda’s latest remarks reflect a growing discontent within the crypto ecosystem, particularly among stakeholders who advocate for a more balanced regulatory framework.
Along with fellow Commissioner Hester Peirce, dubbed the “crypto mom” for her consistent support of pro-crypto initiatives, Uyeda has called for regulations that encourage the growth of digital assets rather than stifle innovation.
During the interview, Uyeda emphasized the need for clearer guidance from the SEC, stating that the agency’s policies and approach over the past few years have been “just really a disaster.”
The Commissioner pointed out that the agency has primarily relied on “policy through enforcement,” leading to confusion within the industry. “We have done nothing to provide guidance on it,” he added, noting that the lack of clarity has resulted in “inconsistent rulings from different courts.”
Calls For Clear Rules On Crypto Classification
The SEC’s aggressive stance has been underscored by recent lawsuits against prominent platforms such as Binance and Coinbase in 2023, as well as Wells Notices issued to Robinhood and Crypto.com, adding to the sense of discontent among participants.
Crypto.com, in particular, filed a lawsuit against the SEC, arguing that the agency is overstepping its jurisdiction and has improperly classified nearly all cryptocurrency transactions as securities. The platform contends that the SEC’s enforcement actions are “arbitrary and capricious.”
Uyeda responded to these developments by highlighting the broader frustrations with the SEC’s lack of interpretive guidance. “We’ve not provided interpretive guidance as to what you can and cannot do,” he stated, adding that this uncertainty complicates compliance for companies involved in securities offerings.
The Commissioner also criticized the SEC for adopting what he called an “unlawful rule” that broadly categorizes crypto asset trading as “securities transactions” under what many experts believe is an outdated framework for the proper regulation of digital assets.
The commissioner emphasized the need for the SEC to lay out clear guidelines regarding what falls within and outside of securities laws. Uyeda also noted that, within the jurisdiction of the Securities and Exchange Commission, there should be a focus on how brokers handle these assets under their securities law.
At the time of writing, total crypto market capitalization stands at $2.064 trillion, down nearly $300 million after closing September at a one-month high of $2.29 trillion.
Featured image from DALL-E, chart from TradingView.com
