The SEC’s history of enforcement actions against crypto reveals that the agency is all bark and no bite. While they have sent many enforcement letters to crypto companies and pursued cases against scams and fraudulent activity, fines and settlements are the only punishment administered. The SEC’s attempt to regulate digital assets as securities is exemplified by the Telegram case, where they had to return $1.2 billion to investors and pay an $18.5 million fine. However, precedent-setting cases like LBRY versus the SEC show that the agency cannot regulate crypto on the secondary market. Overall, the SEC’s influence on the crypto industry is limited.
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The SEC is trying to control how we invest in crypto. That needs to stop.
Introduction:
Cryptocurrency is slowly taking over traditional modes of investing, and the SEC wants to regulate it. Many people believe that it’s intrusive, and there’s no need for it. This article will delve deeper into the history of SEC enforcement actions against crypto and why its need to regulate needs to stop.
The SEC is all bark and no bite:
After looking through the history of SEC enforcement actions against crypto, one evident thing stands out – the SEC is all bark and no bite. They have been serving enforcement letters to crypto companies, and although some have been settled, the SEC has not had a significant impact on crypto. Full control of crypto is far beyond SEC control, and the sooner they realize that, the better.
The history of SEC enforcement against crypto:
Back in 2013, SEC enforcement actions were relatively rare and mostly taken against scammers who used digital assets to defraud investors. However, the numbers started increasing between 2014 and 2017, SEC versus Erik Voorhees for SatoshiDICE being one of them. ICOs were pumping, and the SEC was trying to keep up with ICO mania. An example is the SEC versus John McAfee for promoting an ICO and SEC versus Telegram.
The SEC’s playbook – Pay Up:
It’s evident that fines, repayments, and money are always the result of these cases. They don’t go to court, and some have not even been settled. The Telegram case foreshadows how the SEC is trying to regulate crypto by classifying digital assets as securities. This approach has caused more harm than good, as it significantly affects the growth and stability of the industry.
LBRY versus the SEC:
The SEC issued an enforcement action against LBRY Inc. for offering unregistered digital asset securities and making money from it. The case was settled in New Hampshire, and the SEC won summary judgment over LBRY Inc. However, on January 31, 2023, a judge ruled that LBRY’s token was not a security on the secondary market. The precedent has been set, and the SEC can’t regulate crypto on the secondary market.
Conclusion:
In conclusion, SEC’s irrational fear of crypto being destroyed by a tyrannical lizard person is nothing more than a bad dream. The industry is thriving, and unnecessary regulations are not needed. The SEC needs to stop trying to control how we invest in crypto as they’re all bark and no bite. The history of SEC enforcement actions against crypto shows us that they have little impact on the industry. They should take a hands-off approach and let the industry flourish on its own.
