SEC Commissioner Mark Uyeda criticized the agency’s approach to crypto regulation, acknowledging that it has been a “disaster for the entire industry.”
He made the statement on October 9, during an appearance on the Fox Business show “Mornings with Maria,” in response to questions about the SEC’s recent actions against prominent crypto companies.
Rely on enforcement
Uyeda said the SEC has chosen to take enforcement action without providing clarity to crypto companies, which has significantly contributed to the current uncertain landscape in the US. He added:
“We have implemented ‘policy through enforcement’ without providing guidance. As a result, courts had to intervene, leading to inconsistent rulings.”
His comments came in the wake of a lawsuit filed by Crypto.com, accusing the SEC of exceeding its jurisdiction by treating most crypto tokens as securities. The lawsuit argued that the regulator had unilaterally expanded its powers and called for clearer legal boundaries.
Uyeda refrained from commenting directly on the case, but acknowledged broader issues within the SEC’s approach to digital assets. He highlighted the lack of interpretive guidance on how digital assets should be treated under existing securities laws.
According to Uyeda:
“There is growing frustration with the lack of guidance on what is allowed and how to comply with securities regulations.”
Legal battle
The legal challenge is the latest in a series of confrontations between crypto companies and regulators. In March, Coinbase also took legal action against the SEC, aiming to clarify the legal treatment of digital assets.
Meanwhile, the agency’s lawsuit against Ripple Labs has taken a new twist after the SEC filed an appeal to overturn its ruling that XRP sales to retail investors did not violate securities laws.
Both companies have expressed concerns about the agency’s enforcement tactics.
Uyeda emphasized the importance of establishing clearer regulations in the future, especially as the crypto industry continues to evolve. He stated:
“You cannot address these issues without first defining what is covered by securities laws and what is not.”
The SEC has faced increasing criticism from lawmakers, with Republicans in the House of Representatives recently questioning Chairman Gary Gensler’s classification of certain crypto-related activities as securities offering.
Uyeda’s comments echo those of Commissioner Hester Peirce at the Congressional hearing, when she similarly criticized the SEC for failing to provide clarity to the industry.