Mulvaney said he thinks the agency is “playing its hand” by taking enforcement action to strengthen its claims on the industry, but in doing so it has lost its impartiality.
Even within the SEC, there is disagreement over how the agency handles crypto. Hester Peirce, one of the SEC’s five commissioners, has publicly opposed several crypto-related actions, aiming, she says, to foster discussion and heal the agency’s “dysfunctional” relationship. and the crypto industry.
“We have not done our job as regulator. We did not provide a path to compliance and instead took enforcement action after the fact,” says Peirce. Even if the agency’s actions are motivated by a desire to protect investors, “the strategy is one of jurisdictional maximization,” she says. “And one way to plant a flag is to take enforcement action.”
SEC Chairman Gary Gensler’s office did not respond to a request for comment.
The SEC’s tilt toward the industry was met with the CFTC’s refusal to cede jurisdiction. The agency’s lawsuit against Binance – by far the world’s largest cryptocurrency exchange, which has so far remained largely beyond the reach of US regulators – specifically refers to popular cryptocurrencies including bitcoin , ether and litecoin, as raw materials.
The CFTC did not respond to an interview request, but in a statement announcing the lawsuit, CFTC Chairman Rostin Benham paved the way for further action against crypto companies. “This should be a warning to anyone in the digital asset world that the CFTC will not tolerate deliberate circumvention of U.S. law,” he wrote.
In a blog post responding to the CFTC’s lawsuit, Zhao said Binance “disagrees with the characterization of many of the issues alleged in the complaint.” He also called the lawsuit “disappointing,” particularly because Binance had “worked cooperatively” with the CFTC. Binance declined to provide official responses to further questions about the lawsuit.
With no clear guidance from Congress on whether the SEC or CFTC should take over when it comes to regulating the industry, crypto companies should do what they can to preempt possible complaints coming on both sides. But this is made difficult by the lack of crypto-specific guidance from both agencies.
“It’s like driving on a road with no signs or lanes, trying to figure out the rules based on who’s stopped,” says Dave Siemer, CEO of Los Angeles-based crypto investment firm Wave Digital Assets. “You’re just guessing.”
