A pro-bitcoin lawmaker is furious that the United States is taking a “third-world, developing-economy approach” to cryptocurrency regulations, thanks to the lax SEC and the bumbling Congress.
Republican Congressman Warren Davidson warns that the legislative foot-dragging is putting the United States at a competitive disadvantage in the burgeoning crypto market. So he says the SEC had better wake up — or else the US will be left behind.
Congressman Davidson sounded the alarm June 25 at the inaugural meeting of the newly-assembled House Task Force on Financial Technology.
Specifically, Davidson asked why the SEC feels no sense of urgency to issue regulatory clarity vis-à-vis cryptocurrencies like bitcoin.
Davidson explained that the frustrated industry has been waiting for the SEC to issue regulatory guidelines, so it knows how to proceed. Davidson says leaving the crypto-sphere in this kind of legislative limbo is regressive and unfair.
“This is a third-world, developing-economy kind of approach, [where] if you want to launch a company, you go negotiate with the government. And maybe you can get your deal, and maybe your deal is different from this other person’s deal.”
Davidson says that while the Securities and Exchange Commission is fumbling around, crypto businesses are moving off-shore to places where there’s more regulatory certainty.
“We need the certainty that if you do these things, you will be deemed an asset. And that’s been one of the drawbacks of regulatory guidance. It’s guidance that’s often not found to be binding. Then you wind up with a patchwork of court decisions that try to discern things after the fact. And frankly, it scares off capital.”
In response to the fiery criticism, the SEC’s Valerie Szczepanik claims the agency has been “quite clear” about cryptocurrencies. However, the industry begs to differ.
Szczepanik is the SEC’s senior adviser for digital assets, a new position that was created specifically to address the budding crypto industry.
“We’ve put out guidance at least on [initial coin offerings] beginning in 2017 about how we apply the law to the issuance of digital assets. We’ve put out a number of statements since then. So we believe that the guidance is clear.”
However, Szczepanik conceded that cryptocurrencies and blockchain are new, so the SEC has been lagging behind to keep up with the rapidly-evolving technology.
“It’s important to remember that distributed ledger technology is nascent and it’s fast-evolving. Our laws that we have currently are flexible, principles-based, and very broad. This isn’t the first time we’ve had a new technology come to bear. We regulate around activity and conduct.”
As CCN.com reported, Warren Davidson — a bitcoin bull — introduced the Token Taxonomy Act in December 2018 and re-introduced it in April 2019.
The Token Taxonomy Act would amend the Securities Exchange Act to specifically exclude cryptocurrencies from securities laws.
Davidson underscored the importance of avoiding overly restrictive laws that would stifle innovation in the budding industry.
“Virtual currencies and the underlying blockchain technology has a profound potential to be a driver of economic growth. That’s why we must ensure that the United States is at the forefront.”
Congressman Davidson’s scathing criticism of the SEC mirrors the blistering rebuke of SEC commissioner Hester Peirce (a.k.a. – “Crypto Mom”).
As CCN.com reported, Peirce says the SEC should have approved a bitcoin ETF already. Moreover, Peirce says the agency’s timid approach to crypto is handicapping the United States and spotlights what a dinosaur the SEC is. “That’s not a healthy state of being,” she quipped.