- The SEC sent Robinhood a Wells Notice, stoking concerns of further escalating the war on crypto.
- Gary Gensler played down talk of a conspiracy against the crypto industry.
- Industry advocates maintain foul play at the hands of authorities.
The crypto industry is increasingly under siege from US authorities, with high-profile enforcement actions fueling fears of an intensifying crackdown. The arrests of developers behind Samourai Wallet and the Securities Exchange Commission’s (SEC) Wells Notice to decentralized exchange Uniswap have crypto advocates crying foul, alleging overreach at the hands of regulators.
Adding to the industry’s woes, Robinhood’s crypto division has become the latest target, receiving a Wells Notice from the SEC over the weekend. The regulatory bombardment only reinforces the narrative that US authorities intend to take down the crypto industry by any means necessary. However, SEC Chair Gary Gensler has pushed back, stating the agency is merely following the law to uphold investor protections.
SEC Is Doing Its Job: Gary Gensler
In an interview with CNBC, Gensler defended the SEC’s recent actions, stating that the agency is tasked with ensuring firms promoting securities products follow the established laws, including upholding investor protections and ensuring appropriate disclosures.
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When pressed on what Robinhood users should make of the Wells Notice issued to the company’s crypto division, Gensler refrained from commenting on the specific case. However, he addressed the crypto industry more broadly, asserting that the “majority of crypto tokens are securities under the law of the land as interpreted by the US Supreme Court.” He maintained that the SEC merely follows that legal precedent.
Gensler reiterated that US crypto investors are not receiving the required disclosures on digital assets. The SEC chair contrasted this lack of transparency with public companies releasing quarterly reports during earnings season, stating that crypto tokens do not offer similar reporting mechanisms, leaving investors potentially in the dark about what they are investing in.
Despite Gensler’s claims of justified enforcement actions, voices within the crypto industry continue to bang the drum of foul play.
Dissolve the SEC
Citing foul play, Dave Weisberger, the CEO of CoinRoutes, stated that the SEC is not seeking regulation, but rather outright “prohibition of crypto for regular people.” Pushing back on Gensler’s criticism of inadequate disclosures, Weisberger countered, “there’s actually more information on crypto projects, certainly the ones that Robinhood lists, than there are about quite a few other assets.”
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Robinhood lists 15 crypto assets, made up of large/mid caps, the two biggest memecoins, and one stablecoin.
Weisberger posited that the SEC’s true goal with these enforcement actions is to drive the digital asset industry out of the US. He surmised the only motive for such a crackdown is to protect the legacy financial system from disruptive competition.
ShapeShift founder Erik Voorhees echoed these sentiments, declaring the SEC an “illegitimate” organization whose existence violates constitutional rights, specifically individual liberty. In a tweet, Voorhees called for the SEC’s dissolution, asserting no government agency should interfere with adults freely trading among themselves.
On the Flipside
- Robinhood‘s equity volume in February was $80.9 billion versus $6.5 billion for crypto, making its legacy stock business over 12 times larger than its crypto business.
- Aggressive regulatory approaches may drive crypto firms offshore or lead to the exclusion of US investors.
Why This Matters
While it’s unlikely that a US agency would ever admit to underhand shenanigans, bringing enforcement actions against firms that have actively engaged with regulators to seek clarity makes little sense.
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