- Coinbase received Wells’ notice from the SEC, to the frustration and disappointment of the crypto industry.
- Ripple CEO David Schwartz questioned the SEC’s motives in a recent enforcement action.
- The Howey Test has become a complex issue in determining whether tokens act as securities.
The crypto industry is no stranger to regulatory scrutiny, with recent developments at Coinbase and ripple Bring the issue back into the spotlight. The Securities and Exchange Commission issues a notice to Wells Coinbasewhich usually precedes enforcement action, has led to criticism from Ripple CTO David Schwartz and disappointment from some XRP enthusiasts and the broader crypto community.
Schwartz is frustrated with the SEC
In recent tweets, Ripple CEO David Schwartz has criticized the SEC’s actions toward Coinbase, suggesting that its motives may be motivated by incompetence or a desire to protect insiders and early investors.
Questioning the SEC’s true intentions behind its recent enforcement actions, Schwartz expressed frustration with the agency’s enforcement of Howey testwhich he believes is not as simple as some people think.
The CEO noted that even senior securities attorneys at major law firms struggle with identification How it is applied For many tokens, including Ethereum (ETH), the second largest cryptocurrency.
Schwartz’s comments echoed those made by David Marcus, former blockchain lead at Meta, who noted that the Howey test is complex. In addition, some members of the XRP community expressed their disappointment that the industry failed to stand together when Ripple was under fire, which could weaken the industry.
Coinbase fights for ‘reasonable crypto rules’
In response to the SEC’s actions, Coinbase stated in a blog post that it have requested Americans “reasonable encryption rules” but instead received legal threats. The company has shared details of its business with the Securities and Exchange Commission at more than 30 meetings over the past nine months, seeking to build a path to registration.
However, according to Brain Armstrong, the CEO of Coinbase, the SEC gave “essentially 0 feedback on what needs to change, or how to register.” The company also indicated that their S1 filing was approved by the Securities and Exchange Commission when they went public in 2021, knowing the details of their business. Coinbase feels the SEC has now changed its mind about what is permissible.
on the flip side
- So far, enforcement actions by the SEC have not resulted in clearer regulations for the cryptocurrency industry.
- While the cryptocurrency community currently views the SEC as an adversary, more transparency and regulation from the SEC would really benefit the industry in the long run.
Why should you bother
These comments highlight industry frustration with the SEC’s lack of clarity and consistency in enforcing cryptocurrency regulations. This lack of clarity ultimately affects the entire cryptocurrency market, and regulators need to set reasonable rules and provide guidelines to foster innovation and growth in the industry.
For more information on Coinbase’s recent legal issue with the SEC, read here:
Coinbase Files Ire SEC Files As Lawsuit Facing Major Exchange
For details on how Ripple is using its resources to help children under cancer care, check out:
Ripple joins GOSH to help families affected by cancer