The policy director of the US Blockchain Association criticizes the unfair enforcement of the Securities and Exchange Commission (SEC).
The day before, the SEC, in connection with the insider trading case of a Coinbase employee, announced that nine issuers of cryptocurrencies* and one exchange where they are listed violate securities laws. Still, neither of them is a defendant in the case nor didn’t spend a day in court, writes Jake Chervinsky.
“If this is not forced regulation, then what?” the expert asks.
Here is the full content of his tweets.
“Insider trading in itself deserves to be punished. However, the SEC claims that nine cryptocurrencies are unregistered securities in order to establish its jurisdiction over them. To my knowledge, the SEC has never dealt with these cryptocurrencies. There are no relevant guidelines or rules,” Czerwinski writes.
“To win, the SEC must prove that at least one of these cryptocurrencies is a security,” the expert emphasizes.
“In fact, the respective coin issuers are also subject to prosecution,” Chervinsky said. However, since the SEC did not designate them as defendants, the issuers cannot defend themselves in court. Very dishonest and unfair.”
He goes on to say that some of these cryptocurrencies are listed on other exchanges in the US. Those exchanges will now consider whether they should delist these coins to protect themselves from SEC enforcement actions. Remember the time of the Ripple (XRP) lawsuit, the expert suggests.
Czerwinski then recalled that regarding this issue, Caroline Palm, a member of the US Commodity Futures Trading Commission (CFTC), also criticized the SEC, saying it was “regulation through enforcement.”
“In short, the SEC seeks to expand its regulatory powers in the cryptocurrency market through enforcement without making any effort to prove that securities laws apply to cryptocurrencies,” Chervinsky concludes.
“It is sad but not surprising that the SEC is unfairly attacking cryptocurrencies. As mentioned earlier, the SEC plans to tighten enforcement this year. This is just the beginning. I hope that the next move by the SEC will not be too aggressive and unfair,” said a spokesman for the US Blockchain Association.