In an article published by the Wall Street Journal’s editorial board, it criticized the US Securities and Exchange Commission (SEC) for causing “confusion” with its approach to cryptocurrencies.
“Regulators“ pose a danger ”to investors due to their ambiguous approach to determining how to handle cryptocurrencies.
This uncertainty is also demonstrated in the lawsuit filed by the Securities and Exchange Commission against Ripple Labs, a digital currency issuer. In December, the SEC accused Ripple of issuing $ 1.3 billion of unregistered securities based on the company’s currency’s initial offer in 2013. The SEC says Ripple’s efforts to promote its product and profit from it qualify the currency as a security and argue that it is subject to restrictions governing stock sales.
There was a turning point in the incident on April 7 when Ripple was given access to SEC’s internal documents on how to determine whether a cryptocurrency is a security. The findings in this case, for example, the SEC’s exemption from Bitcoin and Ethereum but not treating them as securities “highlights the inconsistency of the SEC’s approach”.
According to the article, these exemptions are based on statements made by former SEC Chairman Jay Clayton without a formal rule setting. In the Ripple case, Judge Netburn’s findings show that the SEC does not set clear rules on which currencies it feels it should regulate and which not. This situation “poses a danger” to retail investors.
Prices for Ripple and similar currencies have since followed the court’s statements regarding the SEC’s case. US participants in the $ 2 trillion cryptocurrency market are seeking clarity that the SEC refuses to provide, preferring to disclose their positions through individual sanction actions.
In the article; It is said, “This confusion and uncertainty poses a risk to investors.” Gensler, the new chairman of the SEC, is thought to signal on Wednesday that he is open to the proposal, saying “Let’s work with the commissioners and see how we can move forward.” The next step for the SEC should be to realize the detriment of its current ad hoc approach. Investors and developers deserve to know if their action in the market is legal before reading the news of the latest SEC lawsuit.