Kraken co-founder Labels SEC ‘Extortionist,’ Says Regulator’s Actions ‘Threaten Innovation’

Powell, echoing Ripley’s sentiments, labeled the SEC as an extortionist and characterized its accusations as an affront to America, questioning the regulator’s motives. He suggested that financially constrained crypto firms should reconsider operating in the U.S., as the SEC is aware that a genuine legal battle could cost over $100 million and valuable time.

Senator Calls for SEC to Rethink Crypto Enforcement

US Senator Cynthia Lummis has recently criticized the SEC’s regulatory approach towards Kraken, highlighting the absence of clear crypto rules.

Lummis pointed out that, despite crypto companies’ attempts to seek guidance from the regulator – they have continued to be met with enforcement actions and unclear rules around what does and does not constitute a securities offering.

The SEC’s Extortionist Approach to Crypto

The SEC’s lawsuit against Kraken , alleging that the exchange operated an unregistered securities exchange, represents the latest episode in its ongoing crackdown on the cryptocurrency industry. This action reflects the SEC’s expansive interpretation of securities law, which classifies nearly all major cryptocurrencies as securities.

Critics argue that the SEC’s stance is stifling innovation in the cryptocurrency space. They point out that while the regulator insists that most cryptocurrencies fall under its purview, it has not provided a clear path for exchanges to register their businesses with the agency.

The SEC’s aggressive approach to cryptocurrency regulation is raising concerns about its potential to stifle innovation and hinder the growth of the industry. Its actions are being perceived as extortionist, as it appears to be using its regulatory authority to force exchanges to comply with its expansive interpretation of securities law, even in the absence of a clear and workable regulatory framework.

The SEC’s stance is particularly concerning, given the potential of cryptocurrency to revolutionize various sectors, including finance, supply chain management, and data security. By stifling innovation in this emerging field, the SEC risks hindering progress and potentially depriving society of the benefits that cryptocurrency could bring.

The SEC’s actions highlight the need for a more balanced and nuanced approach to cryptocurrency regulation. One that fosters innovation while ensuring investor protection and market integrity. The current regulatory landscape, characterized by the SEC’s aggressive enforcement and lack of clarity, is unlikely to achieve these objectives. A more collaborative approach involving industry stakeholders and regulators is essential to establish a regulatory framework that promotes innovation and protects investors.