The United States-based advocacy group, the Chamber of Digital Commerce, claims that the Securities and Exchange Commission (SEC) employs the enforcement-based method to classify digital assets as securities and impose penalties on cryptocurrency businesses. This means that the SEC does not issue clear guidance on which digital assets are considered securities, but instead takes a case-by-case approach, bringing enforcement actions against companies that it believes are violating the securities laws.
This approach has been criticized by the Chamber of Digital Commerce and other industry groups, who argue that it creates uncertainty and makes it difficult for cryptocurrency businesses to operate in compliance with the law. They also argue that the SEC's enforcement actions have been selective and unfair, targeting certain companies while ignoring others.
The SEC has defended its approach, arguing that it is necessary to protect investors from fraud and manipulation in the cryptocurrency market. The SEC has also stated that it is working on developing clear guidance on which digital assets are considered securities, but that this is a complex process that takes time.
In recent years, the SEC has brought a number of enforcement actions against cryptocurrency businesses, including Ripple Labs, Inc., LBRY, Inc., and Celsius Network Limited. In each of these cases, the SEC alleged that the company was selling unregistered securities. The cases are still ongoing, and it is not yet clear how they will be resolved.
The SEC's enforcement-based approach to classifying digital assets as securities has had a significant impact on the cryptocurrency industry. Many companies have delayed or cancelled plans to launch new digital assets, fearing that they will be targeted by the SEC. This has slowed down the growth of the cryptocurrency industry and made it more difficult for investors to participate.
The Chamber of Digital Commerce and other industry groups are urging the SEC to adopt a more clear and predictable approach to regulating digital assets. They argue that this would help to create a more stable and supportive environment for the industry to grow.
It is important to note that the SEC's enforcement-based approach is not unique to digital assets. The SEC has used a similar approach to regulating other types of securities, such as microcap stocks and initial coin offerings (ICOs). However, the cryptocurrency industry is still relatively new and evolving, which makes it more difficult for the SEC to develop clear and comprehensive guidance.
Guest: Cody Carbone, VP of Policy · Chamber of Digital Commerce Website ➜ https://digitalchamber.org/
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