Uyeda pointed out that enforcement should not overshadow the various challenges faced by global market participants.
He said SEC should have proactively contributed to creating regulatory guidance in the crypto sector.
In a notable address delivered during the 2023 SEC Regulation Outside the United States conference, Mart Uyeda, a Commissioner at the U.S. Securities and Exchange Commission (SEC), emphasized the importance of clarity and transparency in regulatory enforcement actions.
He talked about the need of proposing definitive rules or guidance for the cryptocurrency market, rather than relying predominantly on enforcement actions.
Transparency and fairness touted as the need of the hour
Uyeda emphasized the immense authority the SEC holds in administering and enforcing federal securities laws.
However, Uyeda cautioned that the ease with which the SEC can launch investigations, even when there is no concrete evidence, must be accompanied by objective and articulable standards.
Uyeda addressed the SEC’s approach to cryptocurrencies and digital assets. He highlighted the ongoing challenge of determining whether these instruments qualify as securities.
Uyeda added that the current enforcement-led strategy is likely to result in protracted legal battles before any clear precedents are established.
He suggested that the SEC should have proactively contributed to creating regulatory guidance in this area instead of relying on post hoc enforcement actions.
SEC and crypto regulations
The remarks from commissioner Uyeda come at a time when the SEC has been clamping down on the crypto sector.
The lack of regulatory clarity for crypto has only added fuel to the fire for the SEC in the lawsuits. However, the general consensus in the crypto community to the SEC in this context has been largely critical.
Ripple’s executives publicly called out the SEC for the lawsuit. Coinbase also took issue with the SEC’s response to its rulemaking petition, deeming it vague and insufficient. Binance was also critical of the SEC in retrospect to the lawsuit.
The upcoming joint briefing between the SEC and Ripple on the 9th of November and the subsequent conclusion could be a turning point in the history of crypto and regulations in the United States.