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In a candid interview on Fox Business' Mornings with Maria, SEC Commissioner Mark Uyeda harshly criticized the agency's handling of cryptocurrencies, acknowledging that its current strategy has been “a disaster for the entire industry.”
Uyeda's x.com/RippleXrpie/status/1844393198254481708″ target=”_blank” rel=”nofollow”>comments It comes amid mounting legal challenges, including a new lawsuit filed by crypto.com against the U.S. Securities and Exchange Commission following the issuance of a Wells notice.
crypto.com's lawsuit alleges that the SEC has exceeded its jurisdiction by enforcing regulations in the cryptocurrency market without issuing clear regulatory guidance. Wells' notice, a formal communication from the SEC indicating that enforcement action is likely, accused crypto.com of operating as an unregistered broker-dealer and securities clearing agency due to its handling of tokens that the SEC considers securities.
Uyeda's criticism of the SEC's approach highlights a growing frustration within the agency and the broader crypto industry.
“We have been sending this 'policy through the app',” Uyeda fixedreferring to the SEC's practice of attacking companies with legal actions without offering explicit guidance on how they should operate within existing regulations. “We haven't done anything to provide guidance on that,” he continued. “And as a result, this has been determined by the courts. And different courts have ruled in different ways.”
In fact, the SEC's reliance on law enforcement has led to legal battles, including a high-profile case against Ripple Labs.
Courts have often issued mixed rulings, increasing uncertainty for crypto companies. While the SEC recently lost a major ruling to Ripple (XRP) regarding the classification of XRP tokens, the agency has already filed an appeal, indicating that these legal fights are far from over.
crypto Companies Are Fighting Back
The crypto.com lawsuit is just the latest in a series of legal showdowns between the crypto industry and the SEC. The lawsuit, brought by Wells' notice, contends that the agency has been regulating beyond its mandate. crypto.com leadership insists that legal action is necessary to protect the future of cryptocurrency innovation in the United States.
Mark Uyeda refrained from commenting directly on the crypto.com litigation, but emphasized the broader issue of the SEC's lack of clarity. “We have not provided interpretive guidance on what can and cannot be done,” Uyeda said, adding that the lack of clear rules has left companies guessing how to comply with securities laws.
Uyeda's comments also touched on the SEC's broader regulatory philosophy, particularly related to environmental, social and governance mandates. He criticized the agency's focus on ESG issues, suggesting that such efforts often stray from financial relevance. “It's about micromanaging a lot of what corporations are doing in things that serve no financial purpose,” he said, adding that financial regulators should not be vehicles for social change.
