In the ongoing regulatory war between the United States Securities and Exchange Commission (SEC) and Coinbase, the regulator has been held in a tight spot for being antagonistic to cryptocurrencies. Now, a former government official has taken a shot at the regulator’s behaviour.
According to Christopher Giancarlo, former chair of Commodity Futures Trading Commission (CFTC), the SEC could have acted deliberately when it brought charges against Coinbase hours before its chief legal officer was set to testify before Congress. He said that, from his experience in leading a federal agency, the move appeared to be “deliberate.”
On Thursday, while attending an event in New York, Giancarlo highlighted SEC’s act of sending an enforcement action right before their appearance to Congress and said “that’s politics.” Giancarlo was the chair of CFTC from 2017 to 2019, one of the main regulator in the US.
In its lawsuit, the SEC accused Coinbase of willfully violating federal securities laws when it listed unregistered securities and offered its staking program. Just few hours before, Paul Grewal, Coinbase Chief Legal Officer (CLO), appeared before the House Agriculture Committee to testify regarding crypto regulations.
At the Congressional hearing, Grewal said it was “disappointing, but not surprising that the SEC has decided to bring legal action against Coinbase today, the day of our testimony before this committee’s critical hearing on creating a workable framework for digital asset regulation. As of writing, the SEC did not comment asked about Giancarlo’s statements.
In particular, the CFTC and SEC have been in a strife regarding the jurisdiction of crypto regulation. While CFTC claims some crypto assets to be commodities, SEC doesn’t agree and have claimed them securities in the recent lawsuits. Additionally, the two political parties in the US are also divided on the topic of crypto regulations. While Republicans are more crypto advocating and have shown support to CFTC, Democrats do the opposite and have backed SEC and it’s chief.
While Coinbase has repeatedly highlighted the need for crypto regulation in the US, SEC has a different opinion. Despite all the criticisms and summons, SEC Chair Gary Gensler has stayed firm on his stance and disregarded the need for regulation. He blamed the industry for non-compliance and called on crypto exchanges to register with the agency.
Giancarlo was also asked about the prospects of various bills to regulate crypto floating in the House. While he was less optimistic about a bill passing through the Senate, he said “I think there is a very good chance that these bills pass the House this year.”
Amid the urgency of regulations, Dorothy DeWitt, federal policy expert, warned crypto companies that even if policy advances, rules can take a decade or more to pass.
Simultaneously, Senator Lummis emphasized that she is working on a regulatory framework that will enable individuals and companies to own and trade digital assets in America. Additionally, the lawmakers have also engaged in the process of crypto regulation with the preliminary discussions however the end results are far fetched.