Oct. 23, 2023
The SEC does face accusations of regulatory overreach and stifling innovation with some of its attempts to regulate cryptocurrencies. A few reasons this criticism arises: SEC lacks specific Congressional authority over crypto, so actions rely on applying broad/vague statutes. Aggressive stance classifying many tokens as securities goes beyond what some view as SEC's jurisdiction. Focus on investor protection ignores benefits of permitting responsible crypto innovation. Expansive regulations fail to differentiate between good and bad actors in crypto space. SEC imposes securities law framework on novel crypto ecosystems where it may not fit well. Crypto regulation seen as exceeding SEC's core area of expertise in securities markets. SEC duplicating efforts of other regulators (CFTC, FTC, FinCEN, IRS, etc) in crypto sphere. To avoid charges of overreach, the SEC needs to craft crypto rules that carefully balance innovation, economic growth, and investor protection. Close consultation with other regulators is key. Rules tailored specifically to crypto, rather than forcing traditional frameworks, would also help address these concerns. Sent with Proton Mail secure email.