SEC Commissioner pushes agency to impose stronger preventative measures on crypto industry
SEC Commissioner Mark Uyeda believes the SEC has not moved aggressively enough to prevent crypto fraud and criticized its piecemeal, after-the-fact approach.
In a Nov. 6 speech, Republican SEC Commissioner Mark Uyeda said the watchdog needs to reassess its approach to the crypto industry.
According to Uyeda, regulatory clarity is the need of the hour, and the SEC has the power to establish it.
Speaking at an international event in London, Uyeda stated that the crypto industry needs a comprehensive regulatory framework, and the SEC needs to turn to proactive rulemaking instead of relying on an enforcement-centric approach.
He emphasized that the regulatory body could have played a more active role in shaping legal and operational guidelines for the crypto sector but had chosen to proceed with a case-by-case enforcement strategy, resulting in extended legal processes.
“Regrettably, the SEC has not embraced this approach, opting for a case-by-case strategy that entails prolonged legal proceedings.”
The crypto sector has consistently voiced its concerns about the absence of clear and uniform regulatory directives, arguing that this ambiguity makes it challenging for businesses to operate compliantly while staying competitive within the U.S. market.
The watchdog has consistently rejected calls to create new rules for the industry based on the reasoning that current securities laws are sufficient to cover cryptocurrencies. However, the regulator has not found much success in pursuing legal action against legitimate entities.
Meanwhile, courts have ruled against the SEC in recent months in landmark lawsuits involving Grayscale Investments and Ripple. The former won its case against the SEC in October, with the presiding judge ruling that the regulator must scrap its rejection of Grayscale’s spot Bitcoin ETF.
Meanwhile, Ripple is closing in on a settlement with the watchdog after the court ruled that most XRP sales did not violate securities laws as they do not constitute securities sales. Essentially, the judge ruled that XRP was not a security when traded on the secondary market.
Lawyers expect the case will continue to go in Ripple’s favor, while the Grayscale win will likely lead to approvals of spot Bitcoin ETFs, including those submitted by TradFi giants like BlackRock and Valkyrie.
These ETFs are predicted to set the foundation for institutional money to begin flowing into the digital asset industry.