Seven American States Criticize SEC for Strict Regulation of Cryptocurrencies
Date: 2024-07-22 Author: Gabriel Deangelo Categories: IN WORLD
Recently, a coalition of seven US states, led by Iowa Attorney General Brenna Bird, sharply criticized the US Securities and Exchange Commission (SEC) for its strict regulation of the cryptocurrency market. Bird and her colleagues believe the SEC is overstepping its authority, harming innovation and free markets.
Main Charges
In an advisory opinion supported by six other states, Iowa Attorney General Brenna Bird argues that the SEC has seized power and is acting beyond its authority. She says the SEC's actions are preventing states like Iowa from doing their job of protecting citizens from cryptocurrency scams and holding criminals accountable.
“The SEC under President Joe Biden is trying to stop Iowa and other states from doing their job of protecting people from cryptocurrency scams and bringing criminals to justice. The SEC has seized power by attempting to take control of the cryptocurrency industry without any accountability. By its actions, the regulator harms the free market,” states the conclusion of the Iowa Attorney General’s Office.
Prosecutor Bird also argues that the SEC is circumventing Congress and existing consumer protection laws. She accuses the Commission of illegally granting itself new powers in violation of the Administrative Decision Procedure Act and the Fundamental Issues Doctrine. The states' opinion also states that cryptocurrencies are not investment contracts under the Securities Act of 1934.
Precedents and Reactions
Disapproval of the SEC's actions is growing not only among states, but also in the cryptocurrency industry. In April, ConsenSys, the developer of the MetaMask wallet, sued the SEC, accusing the agency of trying to regulate ether as a security. Previously, the crypto company Lejilex, together with the Cryptocurrency Freedom Alliance of Texas (CFAT), also filed a lawsuit against the SEC, accusing it of excessively regulating digital assets without legislative authority.
Criticism of the SEC from seven US states underscores tensions surrounding cryptocurrency regulation in the US. Attorneys general argue that the SEC's actions discourage innovation and harm the crypto industry. The situation raises important questions about the scope of federal agencies' authority and the role of states in regulating fast-growing technology sectors.
