Venture capital firm Paradigm has accused the United States Securities and Exchange Commission (SEC) of exceeding its jurisdiction in its regulation of cryptocurrencies. The firm detailed its arguments in an amicus brief as part of the lawsuit between the SEC and cryptocurrency exchange Binance.
“Regulatory gaps exist in crypto, as the Chair himself has acknowledged in the past—only Congress can and should fill those gaps, not the SEC,” the statement noted.
Paradigm Accuses SEC of Overstepping Boundaries
Paradigm raised concerns about the SEC’s approach to crypto in an amicus brief filed in the US SEC’s lawsuit against Binance.
It highlights the potential for the SEC’s strict approach to crypto to impact other asset markets.
“That extraordinary and overreaching construction of the Securities Laws threatens the development of crypto technology in the United States and could destabilize other significant markets that are widely understood to be outside the SEC’s jurisdiction.”
In the amicus brief, Paradigm notes that it has an interest in ensuring that the Securities Laws are interpreted correctly. It clarifies its intention to ensure impartiality and make sure that the SEC doesn’t overstep its jurisdiction.
“Here, and in other cases, the SEC has acted in excess of its statutory authority.”
Furthermore, Paradigm wants to ensure that the SEC’s regulatory overreach does not hinder US innovation.
Additionally, it emphasizes that it should be the US Congress establishing a robust framework for regulating cryptocurrency assets.
However, Chainalysis released recent data revealing that the United States ranks fourth in the global crypto adoption index.
An analysis of index scores spanning from Q3 2020 to Q2 2023 across 154 countries demonstrates that despite a gradual recovery in global adoption, it still remains significantly below its all-time highs.
Meanwhile, concerns about the SEC’s actions impeding innovation have been on the rise in recent times.
Fears of SEC Hindering US Innovation Persist
Chris Larsen, co-founder of Ripple, recently expressed his belief that the US has lost its position as a global blockchain leader.
Larsen pointed out a perceived technological lag in the industry. Subsequently, he attributed this to the strict policies implemented by the administration of current US President Joe Biden.
Additionally, Biden’s administration has recently introduced crypto regulations addressing earnings and production aspects. Furthermore, they have proposed a 30% tax on crypto mining, citing concerns about its environmental impact.
Meanwhile, Ethereum co-founder Joseph Lubin has a positive forecast for the future of crypto regulations in the US. Lubin stated that, similar to the internet, decentralized protocols align well with the core philosophies of the US.
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