The SEC’s Jenga Game: Crypto Edition – What Could Possibly Go Wrong? 🚧💥

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Imagine a bunch of grown adults playing regulatory Jenga with the crypto industry—sounds like a terrible idea, right? Well, apparently, the US Securities and Exchange Commission (SEC) has decided to do just that, but without any of the fun or stability. Instead of building a sturdy tower, they’re blotting out rules like a kid with a Sharpie, risking everything for some weird game of regulatory what-if. 🎲

Our only Democratic Commissioner, Caroline Crenshaw, took the stage—probably wishing she was at a spa—and warned us that the SEC’s approach is like dismantling a fragile Jenga tower built over years. One tiny slip, or in this case, rule removal, and chaos will reign. She called it a “game of regulatory Jenga”—which sounds adorable until you realize it’s the government tearing apart the rules that keep the market from collapsing into a fiery pit. 🔥

Crenshaw also pointed out the SEC has been playing hide and seek with staff, effectively reversing rules under the guise of “guidance” — because nothing says transparency like a good ol’ government shuffleboard. Especially around crypto, where they send mixed signals like a teenager with a crush: “We’re not enforcing, but maybe we are? Wink wink.”

“Our statements on these crypto-related issues are the equivalent of a wink and nod intended to convey that we do not plan to rigorously apply our laws in certain, specific situations.”

Apparently, the SEC has shifted from strict enforcer to what Crenshaw calls “regulation by non-enforcement,” which sounds like the legal equivalent of saying, “We’re watching you… kind of.” She’s deeply troubled — like finding out your dad used to do keto — about the agency abandoning significant parts of its enforcement program, especially in the wild west of crypto.

As the last Democrat standing, Crenshaw isn’t afraid to tell it like it is, warning that this “about-face” messes with the SEC’s reputation and makes the courts question whether they’re even playing the same game anymore. She, notably, opposed the SEC’s cozy settlement with Ripple—and seems to have a thing against events like the 2022 FTX disaster. Basically, she’s warning us not to ignore the big, flashing crypto danger signs while the SEC fiddles.

“Failing to appreciate and address these risks and complexities destines us to repeat hard lessons with high stakes as crypto becomes increasingly entangled with traditional finance.”

Meanwhile, the Republican side is having a good laugh, saying the SEC’s crypto “languished in limbo”—like a cat stuck between two chairs—because apparently, letting crypto flourish without blowing everything up is a problem? They argue that the SEC should chill out and stop stifling innovation, because, as one Chair Paul Atkins put it, “Crypto markets have been languishing in SEC limbo for years.” Ah yes, the sweet sound of regulatory inaction. 🎉

Hester Peirce, the head of the SEC’s Crypto Task Force, chimed in — probably while sipping a latte — claiming that many crypto assets aren’t securities anymore and that the SEC’s approach under Biden has been “evading sound regulatory practice.” Because what better way to regulate a rapidly evolving industry than with a blindfold and a dartboard? 🎯

“Even if a broad swath of the crypto assets trading in secondary markets today were initially offered and sold subject to an investment contract, they clearly are no longer bought and sold in securities transactions. Many of these crypto assets are functional.”

Finally, Commissioner Uyeda suggested that the SEC ought not to use enforcement as a random tool—like a toddler with a hammer—so that future rules aren’t just enforced whims. Basically, everyone agrees that regulation by chaos is neither smart nor safe, but no one quite knows how to fix it while riding the crypto roller coaster. 🎢

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2025-05-20 06:17