- Industry veterans are now calling on SEC Chairman Gary Gensler to step back from crypto enforcement action.
- There are allegations that the top agent favors TradFi players.
The entire digital asset industry feels deliberately attacked by US Securities and Exchange Commission (SEC) Chairman Gary Gensler. Therefore, crypto lawyers and other industry advocates have been pressuring him to withdraw himself as an arbitrator and judge on digital asset enforcement actions.
Jake Chervinsky, a lawyer and Chief Policy Officer at the Blockchain Association, is particularly clear mention in an open letter that Gensler has “falsely assumed that all digital assets are securities”.
Based on this stance, he noted that federal law requires Gensler to back off from all enforcement orders related to digital assets. The attorney also clarified that all SEC enforcement actions must be conducted according to the “Wells process.”
Barr & Young Attorneys described a Well Process as a prelude to a potential lawsuit. SEC commissioners are expected to act as neutral arbitrators during this process. Their main responsibility is to weigh the evidence and arguments of SEC personnel and the purpose of enforcement without bias. Based on Chervinsky’s assessment, Gensler is nowhere near a neutral arbiter when it comes to digital assets.
Instead, since his appointment as SEC chairman, he has merely categorized all cryptocurrencies except Bitcoin (BTC) as securities. While Gensler has consistently maintained his stance on the classification of cryptocurrencies as securities, Congress has not issued any official statement or regulation confirming this argument. This suggests that the whole talk about securities may be a ploy by the SEC chairman against the nascent industry.
Gensler has repeatedly pointed out that the series of enforcement measures imposed on crypto entities were designed to protect investors. However, crypto investors claim that he is protecting someone, but that person is not the investors who suffered a series of losses due to SEC lawsuits.
Gensler may be working in TradFi’s best interest
Some observers say Gensler is deliberately cracking down on crypto companies to pave the way for traditional financial (TradFi) institutions like JPMorgan and BlackRock.
Leading digital asset service providers Binance and Coinbase recently filed two separate lawsuits by the regulator for listing unregistered securities, among other things.
Tokens such as BNB (BNB), Binance USD stablecoin (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos Hub (ATOM), The Sandbox (SAND), Decentraland (MANA) , Algorand (ALGO), Axie Infinity (AXS,) and Coti (COTI) were considered effects. The enforcement action caused the price of many of these coins to lose value and in turn caused investors to forfeit several million.
It was barely a week after these filings that asset manager BlackRock applied for a spot BTC Exchange Traded Fund (ETF). More asset managers like Invesco, WisdomTree, Valkyrie, and Bitwise have also signed up for the same offering. No approval has been granted by the SEC for any of these companies to list a spot BTC ETF, but it seems that institutional investors have suddenly become interested in the crypto space.
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