The SEC is once again threatening to do their job by announcing this week that they will launch a new office specifically to handle crypto assets. The SEC currently has a number of offices under divisions like Corporate Finance, Economic and Risk Analysis, etc. The announcement actually pointed to two new offices, “The Office of Crypto Assets” and the “Office of Industrial Applications and Services.”
Why Make New Offices to Regulate Cryptocurrencies?
According to Renee Jones, the director of the Division of Corporation Finance at the SEC, these two new divisions came about as a response to how large the crypto industry has become. “As a result of recent growth in the crypto asset and the life sciences industries, we saw a need to provide greater and more specialized support.”
This should be viewed as a good thing by people in these spaces. Ultimately, the biggest concern for more sophisticated players entering this space is the lack of regulatory guidance. Everyone has criticized the SEC’s handling of crypto regulation for years, with many saying they have resisted giving clear guidance and instead choosing to regulate by suing companies. In effect, legal precedence can take the place of clear regulatory guidance. It just takes longer, and is less definitive.
What SEC Division Will Regulate Crypto?
These new offices will come into existence in the Fall of this year and will be under the Division of Corporation Finance’s Disclosure Review Program. This makes sense following SEC Chairman Gary Gensler’s statement that some cryptocurrencies are going to be regulated under the CFTC as commodities, while most others will be regulated as securities and require the appropriate disclosures and review processes.
Mark Cuban famously dubbed this “Regulation through Litigation” when Coinbase CEO Brian Armstrongly called out Gensler and the SEC’s inconsistent regulation enforcement.
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