- Questions were raised against SEC’s stance on crypto.
- Resignation of SEC lawyers amid criticism highlights challenges in enforcing crypto regulations.
The increasing regulatory scrutiny in the crypto sphere has been building momentum since the Ripple [XRP] case. Now, with entities like Coinbase, Uniswap, and Tornado Cash under the SEC’s lens, a question arises – Is the SEC attempting to curb cryptocurrency industry with its policies?
Jake Chervinsky, chief legal officer of Variant in a recent stream on Unchained, shed light on the disagreement between the SEC and Coinbase. He said,
“Getting an answer to this question truly is critical for us to understand where the SEC’s jurisdiction begins and ends in the context of crypto.”
The looming uncertainties
However, it’s interesting to note that there has been an inconsistency in legal rulings on the classification of tokens as investment contracts. For example, in the Ripple case, Judge Torres ruled differently from Judge Failla, creating uncertainty about the legal status of tokens.
Amid uncertainties, Bloomberg recently announced the resignation of two SEC lawyers. This came after a federal judge sanctioned and sharply criticized the Wall Street regulator for “gross abuse” of power in a crypto case.
According to Bloomberg sources, Michael Welsh and Joseph Watkins resigned this month from the SEC. They were lead attorneys on a case against DEBT Box and were told they would be terminated if they didn’t resign.
This highlights the complexities and challenges in enforcing regulatory policies in the crypto space.
Talking about judges’ perceptions of the SEC’s conduct and the future cases involving the SEC and the crypto industry, Chervinsky said,
“I think it will work an irreparable damage to the SEC’s reputation. A lot of folks in the crypto industry have been celebrating this order and, I totally understand that because I think it makes us all feel seen.”
Adding to the fray, @HighVibeAssets, an X (formerly Twitter) user noted,
“ The SEC is COOKED.”
Will things change post-election?
As the US election approaches, Chervinsky is quite uncertain as to how a Biden or Trump administration might impact crypto regulation in the country. He said,
“I think it really is time for Congress to step in and decide what the law should be instead of leaving us all in this sort of haze of regulatory uncertainty.”
Moreover, Brad Garlinghouse, Ripple’s CEO, in a separate interview shared his opinion about Washington’s intentions towards crypto-regulations and said,
“Dubai, Singapore even the UK and the EU have seen legislative progress. The U.S has really been ‘behind the 8 ball’ on crypto.”
In an X post he further noted,
“The US will be picking up the pieces of the agency’s disastrous policies long after Gensler is gone.”
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