{"id":560166,"date":"2023-03-06T20:09:15","date_gmt":"2023-03-06T17:09:15","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/lawmakers-should-check-the-secs-wartime-consigliere-with-legislation\/"},"modified":"2023-03-06T20:09:15","modified_gmt":"2023-03-06T17:09:15","slug":"lawmakers-should-check-the-secs-wartime-consigliere-with-legislation","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/lawmakers-should-check-the-secs-wartime-consigliere-with-legislation\/","title":{"rendered":"# Lawmakers should check the SEC\u2019s wartime consigliere with legislation"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a38490eb9423\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a38490eb9423\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/lawmakers-should-check-the-secs-wartime-consigliere-with-legislation\/#%E2%80%9D_Lawmakers_should_check_the_SECs_wartime_consigliere_with_legislation_%E2%80%9C\" >&#8221; Lawmakers should check the SEC\u2019s wartime consigliere with legislation &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Lawmakers_should_check_the_SECs_wartime_consigliere_with_legislation_%E2%80%9C\"><\/span>&#8221; Lawmakers should check the SEC\u2019s wartime consigliere with legislation &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDMvNjg3ODgxMmYtYzMzOC00YzlhLThiNmQtNmEzZjU4MjdlOTkxLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-48054ca8>When Michael Corleone ordered hits on rival bosses in <em>The Godfather<\/em>, he had Don Cuneo locked inside a revolving door and shot. Getting whacked while tr<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ed behind a barred door appears to be the treatment United States Securities and Exchange Commission Chair Gary Gensler has in mind for U.S. crypto projects based on recent SEC enforcement activity and comments by the chair.<\/p>\n<p>The SEC should not be left to wage an unsupervised dirty war on crypto. Congress must both defend its oversight authority and give American crypto developers, entrepreneurs and users a clear path to lawfully carry on their business. Providing a common-sense disclosure framework for asset-backed stablecoins is the place to start.<\/p>\n<p>Gensler\u2019s SEC appears to be attempting to settle \u201call family business\u201d with crypto. On Feb. 9, the SEC settled allegations that Kraken\u2019s \u201cstaking-as-a-service\u201d program (a way to earn rewards for helping to maintain crypto networks) constituted the illegal sale of unregistered securities. Later in the month, <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> emerged that the SEC sent a Wells notice to stablecoin issuer Paxos, indicating a potential future enforcement action over its Binance USD (BUSD) token (a Binance-branded asset designed to keep a 1:1 peg with the U.S. dollar), which the commission apparently also alleges is an unregistered security. And Gensler indicated in a recent interview that basically every crypto project \u2014 \u201ceverything other than Bitcoin\u201d \u2014 could have an SEC target on its back.<\/p>\n<p><a href=\"https:\/\/www.youtube.com\/watch?v=NelPe_T9Qr8\">https:\/\/www.youtube.com\/watch?v=NelPe_T9Qr8<\/a>The SEC maintains it is merely enforcing existing registration and disclosure requirements on crypto tokens and services it considers securities. But this is misleading for two reasons.<\/p>\n<p>One, the applicability of securities laws to the projects at issue \u2014 Kraken\u2019s staking service and Paxos\u2019s BUSD stablecoin \u2014 is, at the very least, contestable. Even more so if the idea is that every crypto token other than Bitcoin (BTC) is to be considered a security. And two, a regulator interested in getting consumers the best disclosures about new products, including stablecoins, would provide clear guidance on how to do so. The SEC hasn\u2019t.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Expect the SEC to use its Kraken playbook against staking protocols<\/em><\/strong><\/p>\n<p>With Kraken, the SEC alleged its staking service involved a type of security known as an investment contract. In broad strokes, these securities cover an investment with an expectation of profit based on others\u2019 managerial or entrepreneurial efforts. Whether Kraken\u2019s service was is debatable. With Paxos, we don\u2019t yet know what type of security the SEC thinks describes the BUSD stablecoin and why, but <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ly speaking, it\u2019s harder, although not necessarily impossible, to see how an asset that a buyer does not expect to generate a profit is a security.<\/p>\n<p>Troublingly, Gensler\u2019s comments also could imply that he views even highly decentralized tokens, like Ether (ETH), as securities. This is inconsistent with previous comments by SEC officials, as well as the idea that securities laws are to address managerial risks \u2014 hallmarks of centralized bodies, not decentralized software protocols.<\/p>\n<p>Moreover, even if one assumes that a particular token or service were a security, there\u2019s still the matter of registration. And this is where the SEC looks like the hitman bolting the door.<\/p>\n<p>It was entirely disingenuous when Gensler declared the process for registering a crypto security is \u201cjust a form on our website.\u201d As Michael Corleone might have scowled, Gensler\u2019s line \u201cinsults my intelligence and makes me very angry.\u201d Because as SEC Commissioner Hester Peirce explained in her dissent against the Kraken action, \u201cin the current climate, crypto-related offerings are not making it through the SEC\u2019s registration pipeline.\u201d<\/p>\n<p>Lawmakers have a vital role in restoring administrative accountability. In a Feb. 14 Senate Banking Committee hearing, Republican Senator Tim Scott told the hearing, \u201cIf Chairman Gensler is going to take enforcement action, Congress needs to hear from him very soon.\u201d Across the aisle, Democratic Senator Kirsten Gillibrand has voiced similar sentiment: \u201cI have many concerns about Chairman Gensler and his approach to this space.\u201d<\/p>\n<p>Oversight would be most welcome. Congress should go a step further by legislating, first providing a practical registration path for stablecoins.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Gary Gensler\u2019s SEC is playing a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a>, but not the one you think<\/em><\/strong><\/p>\n<p>Ostensibly, the SEC wants issuers to disclose stablecoin risks to consumers. The main risk is a stablecoin will \u201cbreak the buck,\u201d losing 1:1 redeemability with the asset it\u2019s pegged to, such as the U.S. dollar, because the issuer doesn\u2019t have the reserves it claims to. Basic requirements around collateral and disclosures subject to antifraud authority would directly address this.<\/p>\n<p>Some, however, including the President\u2019s Working Group, have argued more is needed and only insured depository institutions should issue stablecoins. But limiting stablecoin issuance to banks is just another way of barring the door to new market entrants. Straightforward rules enabling competition, not protectionist restrictions, are the path to continued financial leadership.<\/p>\n<p>The SEC shouldn\u2019t be left in the shadows to try to snuff out Americans\u2019 work on and access to a new class of <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a>. As House Financial Services Committee Chairman Patrick McHenry has recognized, the future of digital assets \u201cis a major political and economic question that must be decided by Congress.\u201d<\/p>\n<p>That decision should include initiating straightforward stablecoin legislation and democratic accountability. After all, a regulator is in no position to demand of Congress, \u201cDon\u2019t ask me about my business.\u201d<\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Jack Solowey<\/strong><em> <\/em>is a policy analyst at the Cato Institute\u2019s Center for Monetary and Financial Alternatives (CMFA), focusing on financial technology, crypto and DeFi. He holds a law degree from the New York University School of Law and a bachelor of arts from the University of Pennsylvania.<\/div>\n<\/div>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Jennifer J. Schulp<\/strong> is the director of Financial Regulation Studies at the Cato Institute\u2019s CMFA, where she focuses on the regulation of securities and capital markets. She holds a law degree from the University of Chicago Law School and an undergraduate degree from the University of Chicago.<\/div>\n<\/div>\n<p class=\"post-content__disclaimer\"><em>This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/lawmakers-should-check-the-sec-s-wartime-consigliere-with-legislation\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Lawmakers should check the SEC\u2019s wartime consigliere with legislation &#8220; When Michael Corleone ordered hits on rival bosses in The Godfather, he had Don Cuneo locked inside a revolving door and shot. Getting whacked while trapped behind a barred door appears to be the treatment United States Securities and Exchange Commission Chair Gary Gensler&#8230;<\/p>\n","protected":false},"author":1,"featured_media":560167,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/cdn-cgi\/image\/format=auto,onerror=redirect,quality=90,width=1200\/https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/6878812f-c338-4c9a-8b6d-6a3f5827e991.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74858,74863,74898,75269,71511,55229,70934,67874],"class_list":["post-560166","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin-regulation","tag-cryptocurrencies","tag-sec","tag-us-government","tag-government","tag-law","tag-regulation","tag-united-states"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/560166","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=560166"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/560166\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/560167"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=560166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=560166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=560166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}