Inconsistency Breeds Confusion

The SEC faced rare court sanctions due to a demonstrated pattern of bad faith and misconduct, undermining its integrity and power. A significant inconsistency emerged when the SEC used conflicting terminology regarding crypto asset securities in different cases, raising doubts about its stance and ability to enforce legal interpretations consistently. This inconsistency suggests a lack of a coherent legal framework and provides defendants with a renewed opportunity to argue for fair notice defenses due to the vagueness of SEC's positions. The retraction of the term crypto asset securities signals potential difficulties for the SEC in asserting authority over secondary markets for digital assets. Congressional hearings highlighted the SEC's inconsistent terminology lacked a legal basis, exposing its shortcomings in both judicial environments and legislative bodies. Moreover, the chairman's self-perceived role as a defender of the dollar creates further friction with crypto interests, indicating a diversion from the SEC's original mandate, leading to the hope that current years will be viewed as an aberration rather than the new normal in regulatory attitudes towards innovation.