SEC Commissioner Mark Uyeda has strongly criticized the United States Securities and Exchange Commission’s (SEC) approach to crypto regulation, labeling it a “disaster” due to a lack of clear guidance. During an appearance on a Fox Business panel on October 10, Uyeda highlighted the regulatory confusion created by SEC Chair Gary Gensler’s enforcement-focused strategy.
Uyeda condemned the SEC’s tendency to regulate through enforcement actions instead of providing well-defined rules for cryptocurrency companies. He stated, “Our policies and our approach over the last several years have been just really a disaster for the whole industry.”
Conflicting Court Rulings from SEC’s Approach
According to Uyeda, this regulatory strategy has led to conflicting court rulings on how cryptocurrencies should be classified and governed. His comments followed Crypto.com filing a lawsuit against the SEC, challenging the agency’s issuance of a Wells Notice, which signals impending enforcement action. The lawsuit argues that the SEC has overreached its authority by claiming that most cryptocurrencies qualify as securities.
SEC Chair Gary Gensler’s aggressive enforcement stance has drawn widespread criticism from the crypto industry. Gensler maintains that existing securities laws apply to crypto, but industry insiders argue that these regulations are outdated and unsuitable for the rapidly evolving digital asset market. This regulatory ambiguity has caused frustration, with many crypto stakeholders demanding clearer rules.
Call for Transparent Regulations
Uyeda advocated for a more transparent regulatory framework, emphasizing that the current approach appears misguided. He said, “The approach we’re taking appears to be the wrong one,” and stressed the need for clear guidelines to determine which digital assets fall under securities laws.
While Uyeda refrained from speculating on Gensler’s motivations, he acknowledged that the SEC’s direction is primarily shaped by Gensler’s vision. Uyeda and fellow Commissioner Hester Peirce have consistently supported a forward-thinking crypto policy, but the SEC’s regulatory agenda remains under Gensler’s control.
SEC Faces Growing Scrutiny
The SEC has faced increasing criticism for its “regulation-by-enforcement” strategy. Critics argue that the agency has failed to establish a clear framework for cryptocurrencies, opting instead for legal action against prominent industry players. Recently, a coalition of seven U.S. states, led by Iowa Attorney General Brenna Bird, filed an amicus brief challenging the SEC’s regulatory stance, calling it a “power grab” that stifles innovation and harms the crypto industry.
The coalition, which includes Arkansas, Indiana, Kansas, Montana, Nebraska, and Oklahoma, claims that the SEC’s actions exceed its authority. Earlier this year, Commissioner Hester Peirce also criticized the agency, stating that it operates in an “enforcement-only mode” when dealing with cryptocurrencies.
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