Commissioner Uyeda Calls SEC Approach a ‘Disaster’ for Whole Crypto Industry

The US Securities and Exchange Commission (SEC) makes regular appearances in crypto news, unfortunately, for all the wrong reasons. Unlike in other countries, where regulators are starting to warm up to the crypto industry, the US SEC, led by Chair Gary Gensler, has been on the warpath with crypto.

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Following the approval of spot Bitcoin and Ethereum exchange-traded funds (ETFs) in 2024 – a remarkable step forward for crypto adoption – many had thought the SEC might ease up a little. 

Sadly, that’s far from the truth. For example, there’s the recent appeal in the case SEC vs Ripple or the Wells notice for Crypto.com, which led the exchange to sue the SEC for its ‘regulatory overreach’.

SEC Commissioner Calls Out Disastrous ‘Regulation by Enforcement’ Approach

But there is criticism from within the watchdog, with Commissioner Mark Uyeda calling the SEC’s approach toward crypto a ‘disaster’.

Speaking to Fox Business during an episode of ‘Mornings with Maria’, Uyeda criticised his own agency for taking enforcement actions against crypto companies without offering clear regulatory guidance, significantly contributing to the current uncertainty in the US crypto landscape.

Commenting on the mess the lack of guidance by the SEC has created, Uyeda added:

We’ve implemented ‘policy through enforcement’ without offering guidance. As a result, courts have had to intervene, leading to inconsistent rulings.

Mark Uyeda, SEC Commissioner

The commissioner’s acknowledgment of the lack of guidance around how digital assets should be treated is a statement that is detrimentally opposite from Chair Gensler’s stance.

Related: Ripple Launches ‘Bank-Grade’ Crypto Custody, Targeting $16 Trillion Tokenisation Market

Gensler keeps saying “the rules of the road are clear” and “come in and register with us”, which has been called out as impossible, time and time again by industry leaders, who have said there is no clear pathway for them.

Is Gary Gensler Trying to Destroy Crypto?

Ripple CEO, Brad Garlinghouse called out the SEC’s hypocrisy, referring to the case of Cumberland, which has become the latest target of the agency.

Commissioner Uyeda calls the SEC’s approach to crypto a disaster – and right on cue the agency sues Cumberland for operating as an unregistered securities dealer. This circus needs to end.

Brad Garlinghouse, Ripple CEO

VP at crypto investment firm Paradigm and former Senior Adviser to the SEC, Justin Slaughter, had some interesting comments to the SEC approach.

Slaughter basically accused Gary Gensler of trying to destroy the crypto sector:

Look, at this point, I’d admire it if Chair Gensler just said openly what he is rumored to say privately: that he’s trying to destroy crypto for sake of other markets and he’s willing to bet the SEC’s regulatory powers at this Supreme Court while singing ‘luck be a lady tonight’.

Justin Slaughter, Paradigm VP

Related: FBI Crafts Fake Crypto Token in Historic Sting to Tackle Market Manipulation, Charges 18

Earlier this week the SEC Chair spoke at an event at NYU School of Law in Manhattan, denying crypto could be used as a currency. He said nation states usually want to have only one currency:

You want one currency unit because it’s a store of value, a medium of exchange, a unit of account. So, it’s unlikely this stuff is going to be a currency. It’s going to have to show its value through disclosure, through use.

Gary Gensler, SEC Chair

Gensler also defended his agency’s enforcement actions, asking “without a cop on the beat, will all our laws be enforced?”