Crypto Criticism: SEC's Slow Rule-Making Under Fire

SEC's Slow Pace Criticized

Adam Cochran, a well-known crypto figure and partner at Cinnemhain Ventures, has openly criticized the U.S. Securities and Exchange Commission (SEC) for its slow rule-making process regarding cryptocurrency regulations. He labeled the SEC's delay as an embarrassment and a threat to technological innovation in the United States.

Historical Context and Current Issues

Cochran pointed out that other regulatory bodies both in the U.S. and globally had already established guidance on digital assets nearly a decade ago. Agencies such as FinCen, IRS, and CFTC offered their guidelines between 2013 and 2015. Meanwhile, the SEC's hesitance to formulate clear rules puts the U.S. at risk of falling behind in the global crypto market.

SEC's Focus and Criticism

While the SEC has been slow to address cryptocurrency, it remains active in other regulatory areas. Journalist Eleanor Terrett noted that the SEC had proposed over 50 new rules on various topics unrelated to crypto in the past two years. This raises questions about the Commission’s priorities, given that only a small fraction of their enforcement actions have been crypto-related.

Coinbase's Legal Battle

Coinbase's conflict with the SEC underscores the frustrations within the crypto industry. The company filed a mandamus petition in April 2023, compelling the SEC to clarify its stance on digital assets. However, the SEC rejected this petition, arguing that Coinbase lacks the legal authority to demand such action. This ongoing dispute highlights the urgent need for regulatory clarity to foster innovation and economic growth in the digital asset space.

Conclusion

The SEC's reluctance to expedite cryptocurrency regulations is drawing sharp criticism from industry leaders. As the global crypto landscape evolves, the U.S. faces potential setbacks if it fails to establish clear and timely guidelines. The call for action is growing stronger, urging the SEC to prioritize digital asset regulations to maintain the nation's competitive edge.