When it comes to cryptocurrency regulations, the Securities and Exchange Commission (SEC) is an outdated truck hooked to an old trailer impeding traffic on today’s digital economic freeway. Founded by the Security Exchange Act of 1934 and guided by the Supreme Court’s 1946 Howey decision, which defined financial securities of another era, the SEC is a wreck that has already happened. Only Congress can fix it, and must do so quickly before more damage is done.
The SEC has manipulated the absence of regulatory clarity of blockchain technology to justify going beyond its authority. SEC Chairman Gary Gensler’s explanation is that the lack of rules mean the industry is the “Wild West” rife with fraud and criminality, and therefore, he must be the “cop on the beat.” In truth, his SEC seems to ignore brazen fraud cases like last November’s Squid Coin scam.
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