Blockchain Association policy director Jake Chervinsky said the US Congress will ultimately set the laws in the country to govern the cryptocurrency industry and not the Securities and Exchange Commission, which this month launched a burst of enforcement actions against digital asset companies. The SEC and other regulatory agencies are bound by this "legal reality," he said.
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Fast facts
- Neither the SEC nor the Commodity Futures Trading Commission "have the authority to comprehensively regulate cryptocurrencies," Chervinsky said in a statement. Twitter thread on Tuesday.
- Chervinsky called 2022 the "worst year in cryptocurrency history" due to the collapse of Bahamas-based cryptocurrency exchange FTX.com, which he said caused "massive damage" to the industry's reputation and caused investors to skeptics will rush to regulate, he added.
- Chervinsky said the ideological gap between House Republicans and Democrats has held back the debate on digital asset regulations, prompting agencies to โextend their authority beyond recognition to 'get things done' without Congress, whether permitted by law or not."
- The policy officer called the SEC "a major antagonist of cryptocurrency" and criticized the agency's recent actions, calling them "regulation by enforcement."
- On Thursday, cryptocurrency exchange Kraken shut down its cryptocurrency staking program and paid a $30 million fine. after the SEC said the program violated securities law. Shortly thereafter, the Paxos Trust Company stopped minting the stablecoin Binance USD (BUSD), which is backed by $16 billion, by order of the New York Department of Financial Services.
- In response, Chervinsky suggested asking Congress for more action and educating it about the industry. He also called for using the courts to litigate regulators to require stricter definitions of existing laws and to help set legal precedents.
- โPolicy is made in all three branches of government and we have ignored the judiciary for far too long,โ he said, adding that he remains optimistic about the future of the crypto industry in the US.
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