By The United States Securities and Exchange Commission (SEC) will continue to “ramp up” its ruling-by-enforcement approach in 2024, Norton Rose Fulbright’s 2024 FinTech Outlook released this past week reveals.
The SEC’s Heavy-Handed Regulatory Approach Continues
The global law firm expects “to see even further ramp-up in enforcement and regulatory actions with respect to US securities laws in the crypto space in 2024,” the report reveals.“The SEC has accelerated its efforts to bring enforcement cases against cryptocurrency platforms on the basis that some of the tokens sold on such platforms constitute securities,” the report continues. “The SEC’s cases seek to subject these markets to the SEC’s regulatory requirements relating to broker-dealer and exchanges.”Norton Rose Fulbright’s analysis seemingly touches on the federal agency’s widely publicized legal cases against a number of key players in the crypto industry, including Coinbase, Celsius, Ripple, and Genesis.If accurate, Norton Rose Fulbright’s prediction would see the SEC continue on an aggressive path toward digital asset regulation despite wide-ranging scrutiny from critics.
New Lawsuit Accuses SEC of “Regulatory Landgrab”
The British-American law firm’s latest FinTech report comes amidst news the SEC is facing its own legal troubles following a Texas lawsuit brought forth by the Crypto Freedom Alliance of Texas (CFAT) and crypto exchange startup Lejilex accusing the federal agency of regulatory overreach.
Today, we at @LEJILEX and the Crypto Freedom Alliance of Texas sued the @SECGov to put an end to its aggressive and unorthodox enforcement actions against our industry: https://t.co/HPQfsOtML1
— Mike Wawszczak (@mikewawszczak) February 21, 2024
“The SEC’s novel attempt to extend its regulatory power to virtually all digital assets reaches far beyond the scope of its statutory authority,” a February 21 court filing reads in part.
Consisting of crypto heavy-hitters such as Paradigm, Coinbase, and Ledger, CFAT’s latest litigation argues that the SEC’s ruling-by-enforcement approach “has left this trillion-dollar industry in an unsustainable state of uncertainty, subject to the arbitrary enforcement whims of an agency with an overly broad view of its own authority.”
Coinbase Pushes Back Against Stringent Enforcement Actions
Currently, Coinbase is locked in a battle with the SEC after the federal agency accused the crypto exchange of selling unregistered securities. Legal counsel for Coinbase are requesting that D.C. Judge Katherine Polk Failla determine whether or not the matter “falls outside of the agency’s delegated authority.”During a January hearing, Failla pushed back against Coinbase’s request to restrict the SEC’s regulatory scope.“I worry that I would be doing exactly the thing you’re alleging the Commission is doing here, which is to take power that I don’t have to stop activity I shouldn’t be stopping,” Failla said.“The answer may be that I’m just out of luck until Congress acts,” she concluded.
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