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, which has been marked by increased enforcement actions and lawsuits against major players.
Commissioner Mark Uyeda recently expressed his concerns and described the situation SEC strategy and regulation of the emerging crypto market as a “disaster for the entire industry” in an interview with FOX Business.
Uyeda criticizes SEC’s enforcement-oriented policies
Uyeda’s latest comments reflect a growing dissatisfaction within the crypto ecosystem, especially among stakeholders in favor for a more balanced regulatory framework.
Along with fellow Commissioner Hester Peirce, dubbed the “crypto mother” for her consistent support of pro-crypto initiatives, Uyeda has called for regulations that will slow the growth of digital assets rather than hindering innovation.
During the interviewUyeda emphasized the need for it clearer guidance from the SEC, stating that the agency’s policies and approach in recent years have been “simply a disaster.”
The commissioner pointed out that the agency has relied primarily on “policy through enforcement,” which has led to confusion within the industry. “We have done nothing to advise on this,” he added, noting that the lack of clarity has resulted in ‘inconsistent rulings from different courts’.
Calls for clear rules for crypto classification
The SEC’s aggressive stance is underlined by recent lawsuits against prominent platforms such as Binance and Coinbase in 2023. Wells notices issued to Robinhood and Crypto.com, increasing the sense of dissatisfaction among participants.
Crypto.com in particular has filed a complaint court case against the SEC, arguing that the agency exceeded its jurisdiction and improperly classified almost all cryptocurrency transactions as securities. The platform claims that the SEC’s enforcement actions are “arbitrary and capricious.”
Uyeda responded to these developments by highlighting broader frustrations with the SEC’s lack of interpretive guidance. “We have not provided any interpretive guidance on what you can and cannot do,” he stated, adding that this uncertainty complicates compliance for companies involved in securities offering.
The commissioner also criticized the SEC for adopting what he called an “unlawful rule” that broadly categorizes trading in crypto assets as “securities transactions” under what many experts say is an outdated framework for the proper regulation of digital assets.
The commissioner emphasized the need for the SEC to establish clear guidelines regarding what is inside and outside the securities laws. Uyeda also noted that within the jurisdiction of the Securities and Exchange Commission, attention should be paid to how brokers handle these assets under their securities laws.
At the time of writing, the total cryptocurrency market cap is $2.064 trillion, down nearly $300 million from September’s one-month high of $2.29 trillion.
Featured image of DALL-E, chart from TradingView.com