For as long as it has existed, the crypto space has had to navigate a complicated relationship with regulatory bodies. For years, regulators essentially ignored the sector and when laws were passed and enforced, things only got more complicated. In the United States, the industry and the Securities and Exchange Commission have seemingly been at odds. These days, more people are putting money into crypto, whether it’s through purchasing legacy tokens like Bitcoin or buying into crypto presales. These are great opportunities for well-versed crypto investors and recreational buyers to buy new crypto coins at lower prices. After all, the billions made within the industry mean that more people need it to succeed, thus more pushback against the SEC.
While there have been several recent wins such as the approval of spot ETFs for both Bitcoin and Ether, many major crypto companies have been prosecuted by the Commission, including Binance and Coinbase. As the US approached election season, there was much talk about the Commission seeing intense pushback should Trump get elected.
Now, barely weeks after the election results, it seems to be happening. 18 republican attorney generals have put forward lawsuits not only against the SEC but its chair Gary Gensler. Led by Kentucky Attorney General Russell Coleman, the lawsuits claim that the commission has overstepped its authority in how it has treated the crypto industry.
The way they see it, the SEC has not respected the balance of power in the United States, instead pushing its own wishes.
“[…] SEC’s assertion of sweeping jurisdiction without congressional authorization deprives States of their proper sovereign role and chills the development of innovative regulatory frameworks for the digital asset industry,” official court documents state.
Consistent complaints that have been made against the SEC include a lack of clear regulations regarding digital assets. For example, Telegram, Ripple Labs, Coinbase, and others have been sued by the SEC for allegedly releasing unregistered securities. Many have pushed back against these claims and others have had to pay hefty fines.
Then there is the issue of the spot ETFs. while they were finally approved this year, it took several years of back-and-forth, with some of the biggest companies in the space applying and being denied. This has, naturally, created a hostile environment between a Commission many see as overzealous and an industry that feels like it is being persecuted.
This was also a big part of President-elect Donald Trump’s campaign. In a public speech, he announced his plant to fire current chair Gary Gensler if elected and replace him with someone friendlier to the crypto space.
While there is an ongoing debate about whether Gensler can be fired so swiftly, it is clear that there is little support for his treatment of the industry. On his part, he has insisted that every action taken has been for the good of consumers.
“Court after court has agreed with our actions to protect investors and rejected all arguments that the SEC cannot enforce the law when securities are being offered — whatever their form,” he said in a recent conference.
As Trump’s inauguration is only weeks away, we will soon see whether he will deliver on his promises.
