Former SEC Official Backs Agency's Approach To Industry Regulation

The thesis that the SEC "controls the crypto industry through enforcement" is wrong, because that's how securities regulation works. This was stated by John Reed Stark, former head of the Office of Internet Law Enforcement.

Reed Stark recalled that similar criticisms of the SEC were voiced in 1998. At that time, it also pointed to "vague" rules that formed barriers to industry growth.

In 2022, the Commission filed 30 cases related to cryptocurrencies.

The figure represented nearly a quarter of the regulator's total enforcement actions for the year - 127 cases.

According to the former official, the SEC has not actually lost a single case in these lawsuits. The agency as a whole does not seek to be overzealous, is guided by the law and is not biased.

In comments on the article, Timothy Cradle, director of regulatory affairs at Blockchain Intelligence Group, asked Reed Stark if clear rules would ultimately be a better policy than regulation by enforcement. He suggested that the agencies clarify that their requirements apply to cryptocurrencies.

Former PA Blockchain Coalition advisory board member Chris Hayes emphasized that "a reasonable solution would be for the SEC to clarify instances where digital assets cannot be registered because of the nature of blockchain."

Earlier, Cornerstone Research suggested that oversight of the crypto industry will remain a priority for the Commission under Gary Gensler's leadership. They recalled that the agency nearly doubled the size of the relevant unit in May.