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Messari Declares War on SEC: “We’ll Do It Better, Faster, and Cheaper”

Last Updated 3 mins ago
Teuta Franjkovic
Last Updated 3 mins ago
By Teuta Franjkovic
Verified by Insha Zia

Key Takeaways

  • Gary Gensler views the crypto industry as full of fraudsters and uses a ‘regulation by enforcement’ approach.
  • In frustration, Messari is challenging the SEC’s regulation, with CEO Selkis declaring independence from the agency.
  • Messari plans to provide better crypto market reporting solutions and challenge the SEC’s legitimacy through courts, Congress, and the media.

SEC Chairman Gary Gensler has consistently portrayed the crypto industry as “rife with hucksters, fraudsters, and scam artists.”

This, he believes, excuses him from proposing concrete rules for the industry. Instead, Gensler opts for a “regulation by enforcement” approach, aggressively suing crypto companies for non-compliance with securities laws without clearly defining what “compliance” entails.

In retaliation and frustration with the current SEC cohort, Messari, like Coinbase, is preparing to challenge the regulator by declaring  independence from the US SEC and its “corrupt” chair Gary Gensler.

Messari Declares War on SEC – Public Challenge Planned Over Crypto Regulation

In his post on X , Selkis stated that the firm intends to cease engagement with the agency until reforms are implemented and leadership is replaced.

Messari has, therefore, decided to challenge the SEC’s legitimacy in information reporting for crypto markets, aiming to provide “better, faster, cheaper” solutions at no taxpayer expense.

In a draft declaration, Messari stated that their mission has expanded to leveraging public blockchains for global financial assets, believing that private market actors are better positioned to meet public needs in the crypto era. Its plan includes challenging the SEC through courts, Congress, and the media, citing the SEC’s ineffective approach to crypto, failure to prevent major frauds, allegations of corruption against Chair Gary Gensler, and questioning the SEC’s authority to regulate crypto following recent Supreme Court decisions.

In the letter, Selkis said that they now treat the agency as a hostile adversary, competitor, and superfluous federal regulator.

Messari Questions SEC’s Role in Crypto Market Reporting

The SEC has been intensifying its crackdown on the crypto industry, extending its focus beyond companies selling digital tokens to platforms, clearing services, and broker-dealer activities.

Under Gensler, this increased scrutiny is expected to continue. Well-funded crypto firms are pushing back, claiming that the SEC is overstepping its legal authority.

Selkis stated  that Messari, a crypto data provider, has attempted to work with the SEC but criticized the agency’s approach. He argued that the SEC isn’t effectively preventing fraud, citing missed cases like FTX and Celsius. Additionally, he claimed that the SEC’s legal actions against Coinbase, Kraken, and Gemini appear politically motivated rather than aimed at stopping actual fraud.

Selkis on Messari
Credit: x/@twobitidiot

Crypto Community Reacts to Legal Developments, Questions SEC’s Regulatory Future

The cryptocurrency community is strongly responding to Selkis’s actions. MartyParty, a crypto analyst, pointed out  recent legal developments undermining the SEC’s stance, such as the Supreme Court’s Chevron case precedent and the dismissal of charges in SEC vs. Binance. He suggests these events have shifted jurisdiction away from the SEC, potentially signaling the end of its regulatory dominance in the crypto market.

Many argue that Messari should also consider Ripple vs. SEC in his narrative, noting that XRP is the only cryptocurrency to have received legal status in US history. Ripple has frequently criticized the SEC for overreaching on crypto assets. It will be intriguing to see how Messari’s perspective on the SEC shapes future decisions.

Crypto Regulatory Reboot

Messari’s Selkis went beyond calling Chair Gensler ineffective, suggesting that the regulatory chief might be corrupt. He criticized Gensler’s lack of clear rules for cryptocurrencies, particularly in defining a security. According to Selkis, this uncertainty is hindering the growth of the US crypto market.

Furthermore, Selkis warned that the US will fall behind in the global crypto race if it continues to rely on the SEC’s current approach. He claimed that regulators in Europe, the Middle East, and Asia are already far ahead in creating clear rules for cryptocurrencies.

In the absence of clear legal pathways, digital asset companies have shifted their innovations to more welcoming regions like the UK, EU, Singapore, and UAE, which have established regulatory frameworks and are reaping the benefits. Meanwhile, some companies have chosen to stay in the US and navigate the complex regulatory environment. Political dynamics are shifting, with Senate Majority Leader Charles Schumer and former House Speaker Nancy Pelosi recently voting  to limit Gensler’s regulatory authority over digital assets.

Additionally, the SEC has recently faced significant backlash for its anti-crypto policy. The Coinbase Political Action Committee has been vocal against the SEC’s stance, and Ripple continues to challenge the agency in court. The FIT21 bill, aimed at providing a clear regulatory framework for digital assets, reflects growing legislative support for the crypto industry. Additionally, the US House repealed the SAB121 veto, highlighting bipartisan opposition to Gensler’s expansive regulatory claims.

The Messari draft letter will soon be revised and sent to the SEC’s commissioners, as well as to Congressional representatives and senators.

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