Criticism is mounting against the United States Securities and Exchange Commission, which remains relentless in its war against cryptocurrencies.
On April 21, the venture capital firm Paradigm published an article about the SEC filing issues.
He claimed that SEC Chairman Gary Gensler’s “attempt to force crypto assets that can’t even constitute ‘securities’ into an inadequate disclosure framework is bad policy.”
The company, which invests hundreds of millions in cryptocurrency and Web3 startups, claimed that the SEC fails to provide crypto asset users and investors with the information they need.
He also denied SEC claims that it offers crypto entrepreneurs a viable path to compliance.
Paradigm points out that the current disclosure policy was developed in the 1930s, long before the Internet. He claims that current policies are “tailor-made for centralized companies issuing securities” and that crypto markets are fundamentally different.
Gensler’s SEC wants to brute force crypto into an ill-fitting disclosure framework
In our latest piece, we show why this is a bad policy that fails to give crypto users and investors the info they need, or provide entrepreneurs w/ a viable path to complyhttps://t.co/jOpxYJSl6U
— Rodrigo (@RSSH273) April 20, 2023
Gensler’s SEC wants to force cryptocurrencies into a disclosure framework that doesn’t fit. In our last article, we showed why this is a bad policy that doesn’t give cryptocurrency users and investors the information they need, nor does it provide entrepreneurs with a viable path to compliance.
The firm noted that securities provide the holder with legal rights against a centralized entity, however, there are no “legal rights” with most cryptocurrencies, but rather “technological skills in a protocol.”
Besides, crypto assets can be completely independent of their issuer and maintain full functionality without their intervention.
Crypto assets can also be traded peer-to-peer and on a fundamentally different technology stack, unlike traditional stocks and shares, that are traded in an “archaic system full of intermediaries”.
The venture capital firm concluded that the financial regulator needs to modify its current disclosure regime to incorporate new technologies and asset classes.
“Unsurprisingly, since there have been no major changes to the SEC’s current disclosure regime, the SEC is unable to effectively regulate crypto asset markets.”
Paradigm is not the only representative of the cryptocurrency industry to have criticized the SEC and its policies.
Congressman Warren Davidson has also spoken out about the agency and its boss, who has a “cop on duty” style.
On April 16, The pro-crypto politician has introduced legislation “to correct a long series of abuses” with the aim of replacing Gensler with a chief executive who reports to the board.
In an April 18 hearing on SEC oversight, Gensler was questioned by House Financial Services Committee Chairman Patrick McHenry. “It is clear that an asset cannot be both a commodity and a security,” McHenry said when Gensler declined to say what he considers to be the classification of Ether (ETH).
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