It’s Time To End The SEC’s ‘Clarity’ Charade On Crypto
For five years, investors and project developers in the $2 trillion blockchain innovation space have been subjected to an increasingly maddening charade that the U.S. Securities and Exchange Commission (SEC) has called “regulatory clarity”. Years of SEC speeches, public statements, meeting records, correspondence and first-hand accounts from market participants provide anything but clarity for the rules on digital assets or distributed ledger technology (DLT) projects. This is another financial crisis in the making.
SEC Chairman Gary Gensler said at an Aspen Institute appearance this summer that the rules are “awfully clear” on crypto. In a recent interview with Financial Times, he urged developers to “talk to us, come in” because the fate of the industry, like all finance, “is about trust.” Few can see this “clarity”, but its absence is so acute that even the biggest U.S. companies in the blockchain industry can no longer count on the SEC to provide any clear guidance other than through a lawsuit.
Seeking clarity, Coinbase got a slapdown
Last week, the CEO of the crypto exchange Coinbase (Nasdaq: COIN), Brian Armstrong, tweeted an account that is now alarmingly familiar. Other crypto companies have been offering lending products for customers who hold digital assets, and the only publicly listed exchange in the U.S. wanted to do the same. So, Coinbase took Gensler’s advice and “went in”. They approached the SEC for guidance on their product. Armstrong says the SEC responded with subpoenas for records and depositions, demanded a list of all their clients who had expressed interest in the product, and finally issued Coinbase a Wells notice – a warning of impending enforcement action. Armstrong said that by May of this year, the SEC was the only office in Washington refusing to meet with him at all.