- The first group of crypto advocates
- A response to the SEC’s crypto crackdown
- Gary Gensler seeks absolute control
- Regulation should be determined by crypto market actors
The Securities and Exchange Commission (SEC) seems to be facing increasing public resistance. A group of crypto advocates is initiating a campaign against the SEC’s crackdown on crypto.
The first group of crypto advocates
The Digital Currency Trader’s Alliance (DCTA) is a nonprofit organization that has started an advertising campaign known as “Stop the SEC”. The campaign encourages retail investors to lobby their representatives in Congress to push back against SEC Chairman regulating crypto by enforcement. The DCTA claims that the SEC’s strategy is unjust and detrimental to retail investors.
With the help of the campaign, retail investors should be able to demand regulatory clarity from Congress and prevent the SEC from exceeding the limits of its authority.
“We created this campaign to connect everyday consumers with their Congressional representatives so they can tell them firsthand how the SEC’s regulation by enforcement approach to crypto is hurting their investments,” said Kevin Trommer, co-founder and deputy director at the DCTA.
A response to the SEC’s crypto crackdown
On February 28, the Coinbase Exchange announced the start of its own campaign, Crypto 435, to promote pro-crypto policies in all 435 Congressional districts of the United States.
According to the DCTA, established by ex-lobbyists Nate Bradley and Kevin Trommer, as well as other public policy analysts, the campaign is aimed to push back against the SEC’s numerous enforcement actions. The industry’s players have suffered from an avalanche of lawsuits, against the backdrop of increased scrutiny after the FTX meltdown and the fraud charges against Sam Bankman-Fried.
Gary Gensler seeks absolute control
It is obvious that Gary Gensler has been long going after regulating the crypto industry, which is worth one trillion US dollars. In 2022, the Commission brought 30 crypto actions — a number which has not been met by any other financial regulator. In the first two months of the new year, the SEC has brought 8 enforcement actions, some of which are aimed at crypto exchanges Kraken and Gemini and crypto trading firm Genesis.
On February 28, online broker Robinhood announced it had received an SEC subpoena in December regarding its crypto-related operations after the FTX meltdown. The Commission has also expressed concerns that the USD-backed stablecoin BUSD is an unregistered security, bringing uncertainty and confusion in the industry to a whole new level.
“Chair Gensler has subjected the crypto community to regulatory purgatory with little to no way to offer registered, compliant products and services in the United States. We need to bring crypto firms into the United States’ safe and strong markets, not relegate them offshore, leaving investors vulnerable to insufficient regulatory safeguards,” said Tom Emmer, the House Republican Whip.
From a legal perspective, the Commission does not have clear jurisdiction over crypto regulation as neither Congress, nor the courts have formally classified crypto as securities. However, the ongoing proceedings between the SEC and blockchain company Ripple are expected to end later this year and may easily set a precedent and enshrine in law the SEC’s authority over crypto.
Regulation should be determined by crypto market actors
The alliance intends to use its campaign against the SEC as a tool to engage retail investors into the law-making process at an early stage while Congress is still setting the guidelines.
“The next few years will be the most critical when it comes to influencing potential crypto regulations. The SEC has abandoned the individual retail investor. We must represent ourselves by organizing and making sure our voices are heard,” commented John Deaton, advisory board member at the DCTA.
