A former adviser to Securities and Exchange Commission (SEC) of the United States has warned that the agency would be making a “serious mistake” if it continues with its intention to conduct an investigation into Coin base and other major crypto exchanges.
As mentioned, the SEC is reportedly ready to continue its investigation into Coinbase regarding the listing of crypto assets that it claims are classified as unregistered securities.
However, the stock market seems to have an ally in the person JW Verretlecturer in law with a specialization in securities and financing at Antonin Scalia Law School.
In an opinion published in the Wall Street Journal, Mr. Verret, who recently served on an SEC advisory board, wrote that the commission would be shooting itself in the foot if it went ahead. .
“The SEC’s position that most tokens are securities and must be registered or face enforcement action – is obtuse. It’s also an approach that works to benefit the scammers and hucksters who have abused the crypto space.”
He believes that innovation requires “rethinking federal securities law” — a law that has been in place since the 1930s. Securities from 1933″ – making the legislation ill-suited to the challenges of the digital age.
He justified his stance by explaining that even if crypto developers “wanted to register their projects with the SEC, like traditional public companies, they would not be able to do so.”
Verret pointed out that crypto projects typically do not have a board, CEO or CFO behind them who could “file the necessary paperwork with the commission.” Similarly, he added, “there is no possibility to vote shares allocated by proxy using the post office, a requirement of the shareholders commission.”
And Mr. Verret adds that the SEC “is a decade behind in releasing financial statements electronically” and “was also behind in allowing CEOs to share company information on social media.” “She shouldn’t,” he warned, “make the same mistake with cryptocurrencies.”
The professor urged the SEC to “build a regulatory regime tailored to the needs of crypto investors,” and follow the SEC commissioner’s advice Hester Peirce – known in the crypto space as “Crypto mother“.
By following Peirce’s recommendations, he insisted, all parties would be “better able to separate legitimate crypto projects from scams.”
Verret believed that “defendants in SEC actions can now use the obscurity of tokens to their advantage.”
But he warned:
“When lawsuits are filed against legitimate companies, like Coinbase, that’s a good thing. When lawsuits are filed against fake projects that steal cryptocurrency, it’s not. Crypto token pluralism goes against the universal application of the definition of a regulated security.”
Coinbase’s Chief Legal Officer, Paul Grewal, previously denied the agency’s accusations and said the exchange does not list securities on its platform. Grewal also claimed that the process the exchange uses to determine whether a crypto asset can be classified as a security has been reviewed by the SEC.
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