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Judging by his recent post on X, Cardano founder Charles Hoskinson is still unpleased with the United States Securities and Exchange Commission (SEC). His anger hinges on how the SEC treated cryptocurrency exchanges under Gary Gensler’s administration.
It is worth noting that the regulator’s approach to the growing sector has changed since Donald Trump became the President.
Why Cardano Founder Calls out the SEC Again
In a March 17 X post, Hoskinson highlighted the SEC’s regulation-by-enforcement approach. He stated that the Commission sued everyone from the largest firms to the smallest projects.
This move cost the crypto industry hundreds of millions in legal fees.
The broader crypto market also lost billions in market capitalization. At some point, Ripple CLO Paul Grewal accused the SEC of intentionally suppressing the crypto market.
With a new administration in the US and the SEC, the crypto industry welcomed several favorable regulatory frameworks and policies.
Amid its pivot, the agency has dismissed its lawsuit against some crypto firms. So far, Coinbase, Uniswap, and Robinhood have had their SEC cases dropped without prejudice.
Despite this positive shift, the crypto industry has heaped backlash against the agency.
With the turn of events, some crypto firms and leaders are now fighting against the SEC.
Amid this, media outlets are publishing stories that paint the regulator as the victim. Cardano’s Founder calls this switch the evil of unelected, career federal employees.
He says the Commission is refusing to be accountable for the harm done to the crypto industry.
“When someone asks you to do something wrong, you resign. You don’t blindly follow orders. You’re not getting jobs now because you lack moral character,” he added.
SEC and Historic Crypto Litigations
In June 2023, the US SEC sued Coinbase for offering unregistered securities to the country’s residents. At the time, the regulator cited 13 cryptocurrencies, including Cardano, SOL, and XRP as investment contracts.
The American cryptocurrency exchange was also charged with unlawfully operating as an exchange, broker, and clearing agency. Similarly, Uniswap came under the regulator’s radar last year.
Like Coinbase, Uniswap was accused of working without complying with required licenses and selling unregistered securities. Leading digital asset service providers Binance, Kraken, and other crypto exchanges also faced this regulatory hurdle.
More recently, the agency agreed “in principle” to dismiss its case against Coinbase, marking the beginning of many such dismissals.
The turn of events was attributed to the changing regulatory tide and the replacement of Gary Gensler by interim Chair Mark Uyeda.
So far, the SEC has paused its lawsuit against Binance and dropped an appeal on crypto broker-dealer rules.
Robinhood, Gemini, and Uniswap have also benefitted from this new “benevolence” of the Commission.
Is an attack From a Crypto Firm Necessary?
Rather than take the pivot in good faith, Coinbase has chosen to fight back.
The exchange has requested the SEC to tell the public how much it spent investigating and enforcing actions against crypto firms.
Coinbase is also interested in determining the number of employees who worked on the enforcement actions. In addition, the trading platform sought to know the number of third-party contractors who were used.
Grewal says the firm will “do what it takes for as long as it takes” to get the information from the securities regulator.
