SEC is losing battles with court rulings going in favor of the crypto industry; experts argue that SEC is secretly winning. The United States financial watchdog, the Securities and Exchange Commission, waged a war against the crypto industry with numerous regulatory actions. But as the agency lost recent cases, was it the right move to target the industry in such a way?
SEC Might be Losing a Few Battles but Is Winning the Regulatory War
The infamous case of SEC vs. Ripple has been underway since December 2020, where the agency alleged that its token XRP is a security. In July 2023, Judge Analisa Torres gave a partial ruling that XRP is not a security. The agency is preparing an argument to appeal the case.
Experts say that many other lawsuits against multiple crypto entities are either lost by the agency or could be lost after events like the Terra Ecosystem collapse, the FTX-saga, and numerous exploits, hacks, and frauds forced the agency to wage war against the bad actors. Data says that after the FTX-saga, the regulatory actions surged by 183%.
These regulatory crackdowns created a hostile environment for the crypto industry in the United States. Some even started thinking of moving offshore. On June 12, 2023, a bill dubbed SEC Stabilization Act was presented in the U.S. House of Representatives, aimed at restructuring SEC and replacing chair Gary Gensler.
How Can SEC Turn the Tides?
If the agency is going through such a treacherous time and losing the cases, how will it hold its head high? Experts say the agency could shift to a “mission accomplished” theme. They could even say that yes, “We did it. We regulate it. It’s now safe.”
Apart from the crypto community, even Wall Street experts joined the bandwagon to criticize the SEC for its action. Others say that the agency failed in its attempt to have jurisdiction over the crypto industry. Vance Spencer, co-founder of Framework Ventures, compared the scenario with the Federal Trade Commission’s chair, Lina Khan. FTC was also very aggressive but lost and is now a favorable agency.
Securities and Exchange Commission chair Gary Gensler is slated to testify before the Senate Banking and House Financial Service Committee on September 12, 2023. Experts are eager to hear what Gensler has to say. Moreover, there is a chance that the agency will approve Bitcoin ETF or Ethereum ETF soon.
SEC’s War Aginst Crypto Was Political – Charles Hoskinson
Cardano founder Charles Hoskinson said the regulatory crackdown had a hidden political agenda. Moreover, he said it had nothing to do with violating securities law. He pointed out the FTX-saga and how Sam Bankman-Fried orchestrated the most significant financial fraud in recent history.
Many politicians and parties received huge donations from SBF and now claim they are not corrupt. It is known that the agency failed miserably to handle the FTX-saga properly and is now blaming every other entity for violating rules. With four crypto bills already in motion, the crypto community can hope for things to be better for the industry in the United States.