While the cryptocurrency sector awaits a resolution in the prolonged Ripple lawsuit, Venture Capitalist Adam Cochran recently expressed his concerns on Twitter regarding the Securities and Exchange Commission (SEC) ongoing delay in formal rulemaking for digital asset transactions. He said that the current pace at which the SEC is embarrassing to the United States.
He also brought to light how the SEC Chair Gary Gensler has referred to past cases to support the notion that rulemaking processes lasting 10 to 20 years are considered acceptable.
His tweet suggested that at present, there is growing concern that innovation in America is facing significant challenges. Curiously, while these innovative sectors face regulatory pressures, there have been instances of OCC regulated banks experiencing failures that have resulted in the potential loss of user deposits. This situation raises doubts about the stability and reliability of the traditional banking system.
“One can appreciate that new technology can be challenging to understand the implications of and merits time to study. Which is why despite crypto being created in 2010, it took other US regulators time to respond – but, respond they did.”
While other departments have been able to clarify their positions, the SEC Chair has been reluctant to provide clear guidance on digital asset transactions. This lack of guidance from the SEC has raised concerns and frustrations within the industry. This projection suggests that the United States may lose its competitive edge in the digital asset space if regulatory clarity is not provided in a timely manner.
The legal dispute between Ripple and the SEC, which commenced in December 2020, revolves around the SEC’s assertion that Ripple did not register approximately $1.4 billion worth of XRP as securities. The outcome of this lawsuit carries significant implications for the broader cryptocurrency industry.