In a recent interview, Mark Uyeda, a United States Securities and Exchange Commission (SEC) commissioner, admitted that the agency’s crypto approach has been a disaster for the whole industry.
Uyeda’s comments come after several legal battles between the SEC and crypto-related entities, including a recent lawsuit from Crypto.com against the regulator.
The agency had earlier issued a Well Notice to Crypto.com, accusing the exchange of operating as an unregistered broker-dealer and securities clearing agency by managing tokens classified as securities.
Crypto.com’s lawsuit claims that the SEC has exceeded its authority by imposing regulations on the crypto market without providing clear regulatory guidelines.
The crypto exchange also noted that its primary objective is to stop the SEC’s unlawful overreach and violation of federal law.
Uyeda Criticizes SEC Crypto Approach
Uyeda’s criticism of the SEC’s strategy highlights the increasing frustration within the agency and the broader crypto industry.
“We have been sending this ‘policy through enforcement,'” Uyeda said, criticizing the SEC’s practice of pursuing legal actions against companies without providing clear instructions on how they should navigate existing regulations.
“We’ve done nothing to provide guidance on it. As a result, this has been achieved by the courts. And different courts have ruled in different ways,” he added.
SEC Targets Major Platforms
In recent years, the SEC has ramped up enforcement, targeting various crypto platforms, including high-profile exchanges like Binance, Kraken, and Coinbase. The securities watchdog claims many tokens traded on these platforms are unregistered and fall under its jurisdiction.
Exchanges have also told the agency that crypto assets are not securities. For instance, on September 13, 2024, US-based crypto exchange Kraken replied to the SEC’s charges of offering crypto asset securities and investment contracts.
Kraken stated that the regulator violated federal securities laws and that its securities classification is unclear.
Gensler to Respond Questions About Crypto Airdrops
Top House Republicans also sent a letter to SEC Chairman Gary Gensler to address questions regarding categorizing crypto airdrops.
The lawmakers contend that the lack of clear regulations surrounding airdrops could weaken the country’s competitive edge in the fast-growing digital economy.
The Republicans asked Gensler to respond to how tokens distributed at no cost are classified under the Howey test and how the SEC differentiates airdrops from other incentives, such as credit card rewards.
