Criticism of the United States Securities and Exchange Commission (SEC) is mounting as the agency remains relentless in its war on cryptocurrencies.
On April 21, Web3's venture capital firm Paradigm released a policy piece about the problems with the SEC filing.
I affirm that SECOND Chairman Gary Gensler's "attempt to brute force crypto assets that cannot even constitute 'securities' into an inadequate disclosure framework is bad policy."
The firm, which invests hundreds of millions in crypto and Web3 startups, said the SEC is failing 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 Cryptocurrencies in Improper Disclosure Framework
In our most recent article, we show why this is bad policy that doesn't give cryptocurrency users and investors the information they need, nor does it give entrepreneurs a viable path to comply.https://t.co/jOpxYJSl6U
—Rodrigo (@RSSH273) April 20, 2023
The firm noted that the securities provide the holder with legal rights against a centralized entity, however, there are no "legal rights" with most cryptocurrencies, but rather "technological capabilities in a protocol."
Furthermore, crypto assets can be completely independent of their issuer and maintain full functionality without their intervention.
Crypto assets can also be traded between peers and on a fundamentally different technology stack, unlike traditional stocks and shares which are traded on an “archaic system full of intermediaries”.
The venture firm concluded that the financial regulator needs to modify its current disclosure regime to incorporate new technologies and asset classes.
"Unsurprisingly, without major changes to the SEC's current disclosure regime, the SEC cannot effectively regulate crypto asset markets."
Paradigm is not the only crypto industry representative to have criticized the SEC and its policies.
Related: Gary Gensler's SEC is playing a game, but not the one you think
Congressman Warren Davidson has also spoken out about the agency and its top "beat cop."
On April 16, pro-crypto politician legislation introduced “to correct a long series of abuses” with the goal of replacing Gensler with an Executive Director who reports to the Board.
At an April 18 hearing on SEC oversight, Gensler was questioned by House Financial Services Committee Chairman Patrick McHenry. “Clearly, an asset cannot be both a commodity and a value,” McHenry said as Gensler. refused to determine what he considers to be the classification of Ether (ETH).
Magazine: Crypto Regulation: Does SEC Chairman Gary Gensler Have the Final Say?
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