Tensions are running high in bitcoin and crypto markets after the shock implosion of three major banks last week—cueing up a potentially earth-shattering Federal Reserve bombshell.
The bitcoin price has leaped almost 20% over the last month, driving the ethereum price and other major cryptocurrencies higher despite fears still swirling of looming “devastating investor carnage.”
Now, as the U.S. Securities and Exchange Commission (SEC) ramps up enforcement actions against crypto companies in the aftermath of the crypto price crash, the head of policy at venture capitalist Andreessen Horowitz (a16z) has accused the SEC of “going rogue” in its pursuit of cryptocurrencies.
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“The SEC is completely out of control. They’re going rogue,” a16z’s Brian Quintenz, a former Commodities Futures Trading Commission (CFTC) commissioner, said during a financial conference this week, it was reported by Coindesk. Quintenz went on to warn the U.S. risks falling behind in the race to foster crypto technology.
“The United States has to make a decision about whether or not it will embrace and support innovators in this country. There are jurisdictions that are mindful about this. That is not what we are seeing in the United States, and the clock is ticking.”
The SEC, led by chair Gary Gensler, has brought various enforcement cases against crypto companies over the last year, arguing that almost all cryptocurrencies meet the definition of a security. In early 2021, the SEC sued XRP developer Ripple for the sale of unregistered securities, kicking off a long-running legal case that it’s still fighting.
Following FTX’s sudden meltdown last year, Gensler has escalated his agency’s crypto crackdown, telling New York Magazine last month he considers all cryptocurrencies “other than bitcoin” to be securities.
“It certainly feels like a crypto carpet-bombing moment,” Kristin Smith, the chief executive of crypto lobby group the Blockchain Association, told Time. “As the lawyers are analyzing this space, they’re thinking really hard about whether or not the U.S. is the appropriate place to base some of these crypto activities.”
The crypto industry, led by U.S. exchange CoinbaseCOIN, has been highly critical of the SEC approach, demanding it create specific crypto rules.
“We consider this regulation by enforcement because it’s creating new legal precedent through an enforcement action, but it would be much better for the entire industry if we just had clear rules to the road,” Perianne Boring, the founder and chief executive officer of the Chamber of Digital Commerce, told Reuters.
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Last week, the former chief of internet enforcement at the SEC predicted FTX rival Binance, the world’s largest crypto exchange, could see a run on deposits—potentially causing “devastating investor carnage.”
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