Crypto Executive: SEC Lacks Plan, Logic, and Respect for the Law
The legal expert expressed that the commission has no standardized structure or guidelines in a post on his X account. The result, he argues, is that regulators are punitive in their approach to enforcement.
Paul Grewal, Coinbase and Ripple’s general counsel, recently railed against US authorities. Specifically, the crypto executive attacked the Securities and Exchange Commission (SEC), accusing it of lacking regulatory plans. He went on to say that the agency operates without logic and disregards federal laws, which ends up hurting the U.S.’s leading role in innovation.
Many companies have gone bankrupt since the SEC launched its war on the cryptocurrency sector. Others have scaled back the scope of their developments for fear of a crackdown by the commission. In total, hundreds of millions of dollars have been diverted from the innovation sector for the sake of regulatory lawsuits.
The vast majority of tokens, including NFTs, are securities traded without a license, according to the SEC. They violate securities laws in this sense. Under this argument, the agency has numerous open cases against companies, some of which it will lose.
SEC Works Without Law: Crypto Executive Says
The aforementioned crypto executive suggests that the SEC’s actions show that it disregards the law. He adds that the agency contradicts itself with the designation of crypto assets as securities or not. Specifically, it states that only ETH and BTC qualify as securities, but fails to explain why those tokens qualify as securities while others qualify as securities.
In his opinion, the reason is that the SEC has no knowledge of this contradiction and does not have an argument for it. The classification of ETH as an asset that is not a security implies favoritism, according to voices in the crypto sector. In fact, this token is identical to others such as Solana’s SOL, which is in fact considered to be a security.
“There is no plan, no framework, no logic, no due process, and certainly no respect for the law,” Grewal charges. These statements accompanied a document in which the SEC announced another case against Israeli broker eToro.
After being fined $1.5 million, eToro will need to restrict cryptocurrency offerings in the U.S. and only trade Bitcoin, Bitcoin Cash and Ethereum. With this framework, the crypto executive highlights that the SEC lacks an organizational plan and its policy is based on aggressive penalty enforcement.
They just conceded ETH is not offered as an investment contract security in secondary markets. But @SECGov will not explain why ETH and BTC but no others–because they can’t. There is no plan, no framework, no logic, no due process, and certainly no respect for the law,” Grewal wrote via X on September 12.
Procurement Favoritism
The pro-innovation political sectors in the United States are very upset by the Commission’s actions. Recently, it was announced that a group of Republican lawmakers has filed a lawsuit against SEC Chairman Gary Gensler.
According to media reports, the reason for the lawsuit has to do with the agency’s alleged favoritism in its hiring practices. Thus, the Commission makes sure that new officials are in line with the ideology of the Democratic Party, i.e. left-wing, when hiring new officials in high-level positions.
As evidence of such behavior, the representatives cite a 2021 case in a letter. Gensler has been given until Sept. 24 to turn over documents related to its hiring policies.
By Audy Castaneda