Unchained Why the Crypto Industry Believes SEC Regulation by Enforcement Hurts US Consumers - Ep. 378
Jul 29, 2022
Marisa Tashman, policy counsel at the Blockchain Association, dives into the SEC's controversial moves on token classifications and their potential harm to US investors. She discusses the implications of labeling tokens as securities without clear guidelines, highlighting the SEC's approach as 'regulation by enforcement.' Marisa also shares insights on Coinbase's position amidst ongoing investigations and the pressing need for regulatory clarity in the evolving crypto landscape. Additionally, she talks about the promising legislative efforts led by politicians like Cynthia Lummis.
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SEC's Indirect Security Labeling
- The SEC charged a former Coinbase employee and two associates with insider trading, but the real story is their labeling of nine crypto assets as securities.
- This was done indirectly, during an insider trading case, preventing the tokens from defending themselves.
SEC's Targeting of Individuals
- The SEC's approach of targeting individuals in insider trading cases may be a strategy to encourage settlements, as individuals have fewer resources than large entities.
- This method could also be a way to avoid direct confrontation with Coinbase or token issuers.
Regulation by Enforcement
- The SEC's regulation by enforcement approach means they label tokens as securities through enforcement actions rather than formal rulemaking.
- This lacks transparency and denies the targeted entities a chance to defend themselves or offer input.