The SEC has in the last week clamped down heavily on crypto in the US. While the agency believes it is carrying out its legal functions, members of the crypto community, especially influencers have accused the SEC of overstepping its boundaries in their approach towards the industry.
Many crypto influencers and lobbyists have written letters to the commission in the last two weeks, warning them of the dangers ahead as it has to do with violation of citizens’ rights. Today June 13 it the last day to submit any input on the proposed exchange rule.
Although a variety of comments were sent via email and other channels, most of the comments have been around cautioning the SEC to not abuse its powers by pushing too hard in carrying out its duties, which could lead to infringement on third amendment rights.
“These foundational concerns color our specific concerns about the Proposal: that it exceeds the scope of the Securities Exchange Act of 1934 (“Exchange Act”) and the SEC’s authority under that law, and that the Commission is promulgating it in an arbitrary and illogical manner without regard to procedural requirements or to the central problems and costs implicated by the Proposal.,” part of the letter from DeFi Education Fund states.
The SEC and Crypto
The SEC in the US has always been against crypto, but not as much as it has since Gary Gensler took over as the commission’s chairman. Gensler who appeared to be pro crypto prior to his appointment has been very tough on crypto companies in the country despite non-existent regulatory framework for the industry.
The commission has also under Gensler claimed that all crypto assets except Bitcoin are securities and should be registered under the commission. By extension, it also implies that crypto exchanges are securities exchanges and should be registered and regulated by the agency.
There has however been inconsistencies in its definition of securities though. For example the SEC has been in court with Ripple, claiming that XRP is a security. Also recently, it named few cryptocurrencies as securities, causing exchanges to delist those assets.
It is this lack of clarity that has caused confusion in the industry with no sign of hope for crypto exchanges as they strive to meet up with regulatory requirements.
Will the Crypto Industry Bow?
With the pressure mounting on the crypto industry in the US, the choices are becoming limited for crypto exchanges. Strategists at JP Morgan say that crypto exchanges may be forced to bow to pressure and register with the SEC.
The question is, will the industry bow to pressure or will exchanges abandon the country entirely. This is a difficult puzzle to solve since the US is one of the biggest crypto markets in the world.
