The US Securities and Exchange Commission (SEC) has been campaigning to regulate cryptos since 2017. They claim they can oversee many digital tokens and the platforms that trade them.
Nonetheless, as reported by the Wall Street Journal, the SEC’s regulatory jurisdiction extends solely to digital tokens categorized as securities. This jurisdiction encompasses assets like equities and bonds.
SEC President Gary Gensler points out that many of them are illegally distributed. Securities can only be sold to the public if registered with the SEC, and issuers must provide financial information and disclosure of assessed risk.
Engaging in the sale of securities to the broader public, including cryptocurrencies, without proper registration is a violation. Such actions render the issuer accountable for breaching laws designed to safeguard investors’ interests.
Starting from late 2017, the SEC and US courts have recognized 76 cryptocurrencies as securities. Among these, 16 were on one or more prominent US crypto exchanges. However, as per the most recent SEC report, the count of these cryptocurrencies has surged threefold in the past year.
The report comes amid an ongoing standoff between the SEC and crypto companies. They complain that the United States lags behind other countries in digital asset rules.
The latest in a line of critics was Ripple’s CEO. He told CNBC at the Dubai Finance Summit on Monday (May 8) that other countries overshadowed the US by other countries in the field. He added that Njerg’s company would spend about $200 million defending itself in court pending the resolution of the lawsuit filed by the SEC in December 2020.
More Restrictive Crypto Measures
On the other hand, the SEC states that, at the moment, the largest crypto exchanges offer for trading at least 12 disputed cryptos. These are those that have the “weight” of securities and should fall under the Commission’s jurisdiction.
In 2022, the SEC launched 30 restrictive measures to control cryptocurrencies. This was an increase of 50 per cent versus the previous year. In the first months of 2023, the SEC issued 13 enforcement suspensions, an increase of more than 25 per cent over last year’s numbers.