Cryptocurrency has been a digital Wild West for over a decade. In the past 13 years, bitcoin alone has minted tens of thousands of millionaires, and a trillion-dollar industry has risen up to serve cryptocurrencies that proponents call the future of finance.
In the absence of a statutory scheme designed for its existence, entrepreneurs have struggled to innovate with compliance designed in, and there have been instances of cyber theft, hacking and fraud.
➡️ The U.S. Securities and Exchange Commission has led with enforcement and regulation by enforcement
➡️ Now, the SEC is looking to regulate by classifying most cryptocurrencies as securities rather than digital currencies
➡️ Most companies that issue coins would have to meet the same standards as companies that issue stocks, and the SEC would have the power to restrict the activities of crypto firms that don’t.
➡️ Application of the securities laws to digital currencies would stifle the market and any further innovation.
➡️ Patrick Daugherty and I shared in a recent CNET article that we support the Lummis-Gildebrand bill’s proposal to classify cryptocurrencies as commodities.
➡️ The CFTC has a strong record of thoughtful and collaborative regulation over industry, and with other jurisdictions.
➡️ The SEC, by contrast, has focused on enforcement tools that have served to inhibit the growth of a legal digital asset industry from the start, and is doing everything in its power to block further development with unprecedented regulation.
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