Apr 21, 2023

SEC Criticized for Unrelenting Crypto War

The United States Securities and Exchange Commission (SEC) has been facing mounting criticism as they remain steadfast in their stance against crypto. On April 21, venture capital firm Paradigm, which has invested hundreds of millions into Web3 and crypto startups, published a policy paper on the issues with SEC registration.

The paper argued that the SEC’s current disclosure policies were created in the 1930s, long before the internet and are not suitable for crypto assets. SEC chair Gary Gensler’s “attempt to force crypto assets into an ill-fitting disclosure framework is bad policy,” according to the firm.

Paradigm noted that securities provide the holder legal rights against a centralized entity, however, most cryptocurrencies do not offer “legal rights” but “technological abilities in a protocol.” Crypto assets can also be traded peer-to-peer and on a different technology stack than traditional securities.

The firm concluded that the financial regulator needs to modify its current disclosure regime to incorporate new technologies and asset classes. They stated that without major changes to the SEC’s current disclosure regime, the SEC is unable to effectively regulate crypto asset markets.

Congressman Warren Davidson has also been vocal about the agency and its chief “cop on the beat.” On April 16, he presented a bill “to correct a long series of abuses” aiming to replace Gensler with an Executive Director that reports to the Board. In an April 18 hearing on oversight of the SEC, Gensler was questioned by the chair of the House Financial Services Committee, Patrick McHenry.

McHenry asked Gensler to determine what he considers the classification of Ether (ETH), to which Gensler refused to answer. These criticisms of the SEC demonstrate the need for new regulations that can effectively regulate crypto assets and provide users and investors with the information they need.

The SEC’s current stance has also had repercussions on the NFT space. As the SEC’s regulations remain unclear, some NFT creators are avoiding selling their works in the US. NFTs are a type of crypto asset that can be used to represent digital items such as artwork, music, and videos.

Since NFTs are a relatively new asset class, many creators are unsure of the regulations and are opting to avoid selling their works in the US. This has resulted in a decrease in the number of NFTs being sold in the US, and a decrease in the amount of money being made from NFTs in the US.

In response to this, many NFT creators and companies have turned to NFT marketing agencies and Twitter NFT marketing to promote their works. These agencies specialize in NFT promotion and have the knowledge and expertise to navigate the complex regulations surrounding NFTs.

They also have the tools and resources to help NFT creators reach a wider audience and increase their sales. By using NFT marketing, companies and creators can ensure that they are compliant with the SEC’s regulations and can reach potential buyers in the US.

The SEC’s current stance on crypto and NFTs has caused many problems for the industry, but with the help of NFT marketing agencies, companies and creators can continue to sell their works in the US and make money from their NFTs.

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