Democrat lawmaker blasts SEC’s ‘blatant abuse of power’ over crypto enforcement News โธ Regulation
Democrat lawmaker blasts SEC’s ‘blatant abuse of power’ over crypto enforcement
Congressman Wiley Nickel emphasized that collaborative and transparent regulation is key to protecting consumers without hindering innovation.
2 min read
Updated: Aug. 28, 2024 at 8:54 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Congressman Wiley Nickel (D-NC) has voiced strong criticism against the US Securities and Exchange Commission (SEC), accusing the agency of undermining trust in the regulatory system because of itsย “regulation by enforcement” approach.
In a recent social media post, Nickel called the SEC’s approach a “blatant abuse of power” that risks stifling digital innovation across the US. The Congressman has been a vocal proponent of crypto and consistently pushed for a regulatory framework for the industry to ensure customer protection.
His remarks come amid news that the SEC has issued a Wells Notice to OpenSea over allegedly violating securities regulations. This has led toย growing concerns in the crypto industry over the watchdog’s handling of regulations related to digital assets.
Widespread uncertainty
The Congressman warned that the SECโs aggressive enforcement strategy is creating widespread uncertainty, which could derail the progress of emerging technologies, particularly in the Web3 and digital asset sectors.
According to Nickel:
“The SEC should choose to work with Congress to craft clear, fair regulations through a collaborative and transparent process that includes public input.”
He emphasized that only through such cooperation can a balanced regulatory framework be developed โ one that protects consumers and supports rather than hinders the ongoing innovation in digital technologies.
Nickel’s statements have resonated with others in the crypto community, many of whom have long criticized the SEC’s enforcement-first approach.
Calls for collaboration
The lawmaker’s call for a more collaborative regulatory process reflects a broader debate in Washington over how to effectively regulate the rapidly evolving digital asset space without stifling innovation.
The SEC has recently faced backlash for its enforcement actions against major players in the crypto industry, including its reported plans to bring an enforcement action against the NFT marketplace OpenSea.
Many critics argue that the SEC is overstepping its statutory authority by treating digital assets, including cryptocurrencies and NFTs, as securities without clear legislative backing. They believe that the SEC is expanding its jurisdiction beyond what was originally intended by existing securities laws.
Some further argue that by focusing on enforcement rather than collaboration, the SEC is actually undermining its own goal of protecting consumers. They contend that a more cooperative approach with the industry would lead to better, more effective regulations that protect consumers without hindering progress.
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Author 
Assad Jafri
AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
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OpenSea
OpenSea is a decentralized peer-to-peer marketplace for buying, selling, and trading NFTs.