Sunday, February 5, 2023
 

Former SEC Chief John Reed Lashes Out at ‘Big Crypto’ for Catchphrase

  • John Reed Stark took to his newsletter to talk about how crypto lobbyists.
  • The former SEC chief called their catchphrase, i.e., RBE, “misguided”.
  • Stark pointed out that securities regulations are rarely prescriptive but are a “principle-based regulatory framework”.

John Reed Stark, President of John Reed Stark Consulting and former SEC Chief, took to his newsletter to lash out at ‘Big Crypto’, the well-funded and organized group of crypto lobbyists, for their remark on SEC’s ‘Regulation by Enforcement’ (RBE).

Big Crypto the now popular epithet for the extraordinarily well-funded and well-organized group of cryptocurrency lobbyists, educational groups, and other crypto, DeFi, NFT, and Web3 supporting organizations, have been carping about RBE ad nauseam. But that does not make them right.

Stark called the repetitive chorus of RBE not only a misguided, deflective effort designed to tap into sympathetic libertarian and anti-regulatory mores but also “utter nonsense.”

The former SEC chief further pointed out that not only crypto-firms are complaining about the overused and dated RBE tagline, but regulators have also become involved in the RBE debate.

In his argument, he pointed out a statement by SEC Chair Gary Gensler in his November speech, wherein he said, “Some market participants may call this Regulation by enforcement, I call it enforcement.”

In furtherance to his arguments, he stated that litigation is precisely how securities regulation works.

“SEC staff should ignore the predictable and tired RBE slogan. Litigation and SEC enforcement are actually how securities regulation works. The flexibility of SEC statutory weaponry is an SEC hallmark, enabling SEC enforcement to keep fraud in check”, he said.

According to Brian Armstrong, Founder of Coinbase crypto exchange, “Regulation by enforcement has a terrible chilling effect, and rhetoric matters – we’ve already seen a huge amount of crypto talent, asset issuers, and startups go offshore.”

Cameron Winklevoss, co-founder of Gemini, has resonated the same. He states, “Regulation by enforcement does not provide the crypto industry with clear rules of the road. It is important to provide clear guidance so that companies like Gemini can continue to bring simple, safe, and reliable products to our customers in a compliant manner.”

  • John Reed Stark took to his newsletter to talk about how crypto lobbyists.
  • The former SEC chief called their catchphrase, i.e., RBE, “misguided”.
  • Stark pointed out that securities regulations are rarely prescriptive but are a “principle-based regulatory framework”.

John Reed Stark, President of John Reed Stark Consulting and former SEC Chief, took to his newsletter to lash out at ‘Big Crypto’, the well-funded and organized group of crypto lobbyists, for their remark on SEC’s ‘Regulation by Enforcement’ (RBE).

Big Crypto the now popular epithet for the extraordinarily well-funded and well-organized group of cryptocurrency lobbyists, educational groups, and other crypto, DeFi, NFT, and Web3 supporting organizations, have been carping about RBE ad nauseam. But that does not make them right.

Stark called the repetitive chorus of RBE not only a misguided, deflective effort designed to tap into sympathetic libertarian and anti-regulatory mores but also “utter nonsense.”

The former SEC chief further pointed out that not only crypto-firms are complaining about the overused and dated RBE tagline, but regulators have also become involved in the RBE debate.

In his argument, he pointed out a statement by SEC Chair Gary Gensler in his November speech, wherein he said, “Some market participants may call this Regulation by enforcement, I call it enforcement.”

In furtherance to his arguments, he stated that litigation is precisely how securities regulation works.

“SEC staff should ignore the predictable and tired RBE slogan. Litigation and SEC enforcement are actually how securities regulation works. The flexibility of SEC statutory weaponry is an SEC hallmark, enabling SEC enforcement to keep fraud in check”, he said.

According to Brian Armstrong, Founder of Coinbase crypto exchange, “Regulation by enforcement has a terrible chilling effect, and rhetoric matters – we’ve already seen a huge amount of crypto talent, asset issuers, and startups go offshore.”

Cameron Winklevoss, co-founder of Gemini, has resonated the same. He states, “Regulation by enforcement does not provide the crypto industry with clear rules of the road. It is important to provide clear guidance so that companies like Gemini can continue to bring simple, safe, and reliable products to our customers in a compliant manner.”

 

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