The US Securities and Exchange Commission (SEC) is criticized for applying double standards when regulating digital assets. Under Chair Gary Gensler, the SEC’s classification of various altcoins as securities has been called into question, leading to significant industry confusion.
Some critics have stated that it is not proper for the SEC to take such an action because they are seen as politically influenced instead of following the law of the land. The head of the American fintech company Ripple, Brad Garlinghouse, recently mentioned this problem in his Twitter post. He used the document from the ongoing SEC lawsuit against Binance, the biggest crypto exchange, to confirm the regulator’s hypocrisy. Garlinghouse said, Chair Gensler says the rules are obvious, but his SEC cannot comprehend them and uses them unpredictably, thus creating more industry turmoil. Meanwhile, the same ten digital assets were still implicated in the Coinbase suit, strengthening claims that the SEC’s regulatory approach is haphazard.
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The SEC’s Intent to Amend Its Complaint
More recently, in a filing, the SEC proposed to move to court to seek permission to amend its complaint. This way, the regulator mentioned such tokens as SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, Algorand (ALGO), Axie Infinity (AXS), and COTI as securities. However, the agency does not wish for the court to determine whether or not these altcoins are securities. This has further contributed to increasing the perception of its inconsistency in the regulation of firms.
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Stuart Alderoty, Ripple’s Chief Legal Officer, highlighted that when the court in the Binance litigation hinted that the 10 tokens named may not be securities, the SEC appeared to retreat. Meanwhile, the same 10 digital assets were still named in the Coinbase lawsuit. This reinforces concerns that the SEC’s regulation approach is haphazard.
Political Connotations and the Future Prospects
Gary Gensler, the SEC Chair, has become a divisive figure in the digital asset business. Donald Trump, a Republican contender and crypto enthusiast, recently spoke at the 2024 Bitcoin Conference, pledging to make the United States the crypto capital and Bitcoin superpower if elected president. Trump promised to dismiss Gensler on his first day in office and install a new SEC chairperson.
To summarise, the SEC’s handling of digital asset regulation under Gensler is under intense scrutiny. Critics claim that altcoins’ uneven designation as securities causes business uncertainty and may represent a political intent. Resolving these regulatory challenges might have far-reaching consequences for the cryptocurrency business in the United States.
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Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.