As a crypto investor with a background in finance and experience in navigating regulatory environments, I find John Reed Stark’s comments at the U.S. House Financial Services Committee hearing particularly insightful. His perspective as a former SEC official provides valuable context to the ongoing debate within the crypto industry regarding “regulation by enforcement” versus formal regulation.
John Reed Stark, a former SEC officer, has criticized the crypto sector for spreading misconceptions to conceal their absence of openness and responsibility, contradicting the SEC’s stance on “regulating through enforcement.”
At a U.S. House Financial Services Committee hearing on May 7, Stark made the remarks. The SEC’s ex-internet enforcement chief shared that the cryptocurrency sector has been unwilling to comply with existing regulations but desires the legal structure to adapt to their preferences instead.
“The catchphrase of SEC regulation by enforcement […] falls squarely into that last category. Just plain false. […] Crypto promoters represent the most important recent example of industry players accusing the SEC of unfairly policing the markets. I’ve never witnessed such a well-funded, coordinated, and unfounded assault on the SEC and its mission.”
As a cryptanalysis expert, I’d interpret Stark’s perspective as follows: The so-called “regulation by enforcement” in the crypto sector is merely the regulatory body executing its responsibilities. From our end, we refer to this practice as simply enforcing the law.
Stark raised questions during the discussion, pondering how one could perform a thorough valuation of digital assets given their lack of key financial indicators. These intangible assets don’t produce cash flow or yield, don’t employ staff or have management teams, and don’t possess balance sheets, products, services, operational histories, or earnings reports. Consequently, financial analysts, not to mention everyday investors, may find themselves in a predicament when attempting to evaluate these assets based on conventional methods due to the vast absence of relevant data.
In the realm of cryptocurrencies, the term “regulation by enforcement” is frequently employed to critique the approach of the Securities and Exchange Commission (SEC) towards setting rules. Instead of creating definite regulations via formal legislation or rulemaking procedures, critics claim that the SEC sets regulatory standards through its enforcement actions.
“Don’t get me wrong, the SEC is far from perfect. There are SEC cases and SEC rules that I believe are unfair. […] the SEC has not gone rogue but is simply just doing its job. […] the [digital] asset industry needs to get its act together and adapt to the laws that apply to it, not the other way around.”
The hearing aimed to scrutinize and enhance the Commission’s enforcement methods, drawing significant critique towards the agency’s strategy and its impact on both businesses and individuals.
At the hearing, Nick Morgan, the founder of the Investor Choice Advocates Network (ICAN), criticized the SEC for pursuing “selective litigation” in certain cases. He argued that the Commission could disregard unfavorable judgments in specific jurisdictions to secure more advantageous outcomes elsewhere.
“Among many problems, the SEC’s regulation by enforcement policy causes legal uncertainty for ordinary people, including people not accused of fraud who are forced to litigate policy matters on a case-by-case basis, even when a federal appellate court rules against the SEC on a particular policy.”
Read More
- SQR PREDICTION. SQR cryptocurrency
- DOGS PREDICTION. DOGS cryptocurrency
- KNINE PREDICTION. KNINE cryptocurrency
- HI PREDICTION. HI cryptocurrency
- UXLINK PREDICTION. UXLINK cryptocurrency
- METIS PREDICTION. METIS cryptocurrency
- CLOUD PREDICTION. CLOUD cryptocurrency
- LDO PREDICTION. LDO cryptocurrency
- STG PREDICTION. STG cryptocurrency
- EVA PREDICTION. EVA cryptocurrency
2024-05-07 20:21