SEC apologises for 'crypto asset securities' confusion
The U.S. Securities and Exchange Commission (SEC) has faced criticism from Coinbase and Ripple (CRYPTO:XRP) for its inconsistent handling of crypto asset regulations.
Legal heads from both companies have taken issue with the SEC’s approach to classifying digital tokens as securities, highlighting recent admissions by the agency that its actions have led to confusion.
Paul Grewal, Coinbase’s Chief Legal Officer, pointed out Footnote 6 from the SEC’s amended complaint against Binance, where the regulator acknowledged, "The SEC regrets any confusion it may have invited by falsely and repeatedly stating that tokens themselves are securities."
This statement has caused concern among industry participants, who argue that the SEC's vague and shifting stance creates uncertainty in the crypto market.
Grewal was critical of the SEC's approach, especially regarding Ethereum transactions, noting, "That’s apparently for the SEC to know, and the rest of us to find out only if and when we are sued."
He pointed out that the SEC has previously classified tokens like XRP as securities, which seems contradictory given the agency’s recent comments.
This inconsistency has led to confusion about what constitutes a security under U.S. law, raising concerns about regulatory clarity and fairness.
Ripple’s Chief Legal Officer, Stuart Alderoty, also weighed in, commenting on the SEC's ambiguous terminology, such as "crypto asset security."
Alderoty emphasised, "Ripple’s case is over, but the ‘fair notice’ defense is still alive for others."
He criticised the SEC for its lack of clarity, stating, “Seven years later, the SEC apologizes to a federal judge... for the confusion it invited by using the inherently unclear term.”
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