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The Securities and Exchange Commission (SEC), under the leadership of Chairman Gary Gensler, has taken a leading role in the United States’ crackdown on cryptocurrency. In recent months, the agency has initiated multiple enforcement actions against prominent crypto firms that are accused of breaching security regulations.
Critics argue that the agency has implemented a regulation-by-enforcement strategy without establishing a clear framework that accommodates the distinct characteristics of crypto assets. A significant point of ambiguity lies in the definition of a security and its applicability to a wide range of assets, including cryptocurrencies.
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Despite facing pressure during a congressional hearing last week, Gensler appears reluctant to assume the political responsibility of engaging in a constructive dialogue with the industry.
For numerous crypto firms targeted by the SEC, the dilemma is whether to engage in a costly legal confrontation with the regulator or to cease operations in the US and relocate abroad. Most crypto companies are likely to choose the latter option to avoid incurring millions in legal fees.
To gain further insights into the SEC’s actions against crypto and the possible implications, visit the latest Cointelegraph Report on our YouTube channel, and remember to subscribe!
