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SEC Commissioner Hester Peirce, published a hot and spicy take this week on the SEC’s recent settlement with ShapeShift. (Read her full dissent here.)
Pierce, of course, is one of the most outspoken critics of the SEC’s attitude toward crypto assets, and this passage in her dissent is so funny that I have to print it in its entirety.
The SEC’s mantra—“Just come in and register”—is manifestly unsatisfying. One can imagine the dialogue for that scene in a future episode:
Future ShapeShift (“FSS”): Hello, I would like to register as a dealer.
SEC: Why?
FSS: Because I think some of the assets that I plan to deal might be deemed at some point by the SEC to be securities.
SEC: Which ones?
FSS: I’m not sure because I can’t really understand what criteria you use to decide whether a token offering is a securities transaction and, if it is, whether the token that was the subject of the investment contract remains a security in secondary market transactions.
SEC: Well, if you don’t know whether you’re dealing in securities, you can’t register. And by the way, if some of the assets you’re dealing in are not securities, you also can’t register.
FSS: So can you help us think through which assets are securities?
SEC: No. We suggest that you read the 2017 DAO report, and it will all be clear to you. You can also look at our enforcement actions if you want.
FSS: I read it, and I’ve read about your enforcement actions. I still have questions.
SEC: Hire a lawyer.
FSS: I did, and the lawyer has even more questions.
SEC: Sorry, we cannot help any more than we already have. We don’t give legal advice.
That does not read like a typical lawyerly briefing, but it perfectly captures the frustration we in the crypto industry feel – not just as entrepreneurs trying to build new companies, but as investors trying to identify promising new tokens.
The question is always looming over us: When will the SEC sue this company?
We’ve all been complaining about the SEC for the last five years, and it has not done any good. So today I am going to publish a hot and spicy take of my own: it is time for the crypto industry to change our strategy.
From now on, we must focus on Congress, not the SEC.
That does not read like a typical lawyerly briefing, but it perfectly captures the frustration we in the crypto industry feel – not just as entrepreneurs trying to build new companies, but as investors trying to identify promising new tokens.
The question is always looming over us: When will the SEC sue this company?
We’ve all been complaining about the SEC for the last five years, and it has not done any good. So today I am going to publish a hot and spicy take of my own: it is time for the crypto industry to change our strategy.
From now on, we must focus on Congress, not the SEC.
Congress Makes the Laws
The SEC doesn’t make the laws. Congress makes the laws.
If we want better laws around crypto assets, then it’s Congress’s responsibility.
The SEC, in this sense, has been the fall guy. While the entire crypto industry has focused its ire on the SEC, Congress – which has the power to update our laws — has been let off the hook.
It’s like going down to your local police station to complain about changing the speed limit. The cops just give tickets! They enforce the laws, they don’t make them.
It has been a masterful deflection, a magnificent sleight of hand that has fooled us all. We blame the SEC, not Congress.
No more!
It is an election year, and that means Congress will be more willing to listen. It is time we make the most of it.
Three Ways to Influence Congress
First, you can write or call your Congressperson in support of the Financial Innovation and Technology for the 21st Century Act (also known as FIT21). This is a bipartisan bill to properly regulate crypto assets, and this year, we can actually get this done.
I know that calling your representative sounds like a big ask, but the folks at the nonprofit Stand With Crypto have made it easy: they’ll connect you with your Congressperson, and give you the email template or voicemail script. (Try it out here.)
Second, you can vote for crypto-friendly candidates. The site also has a complete list of who’s pro-crypto and who’s not, which you can use to guide your voting decisions this year. (Remember, voting is not all about crypto, but this year we can make it more about crypto.)
Third, you can educate others that it’s Congress, not the SEC, that needs our attention. The SEC is not going to change its tune, unless the courts – or Congress – makes them do it.
Share this post. Send people to Stand with Crypto. Blog, tweet, and talk about it. Three words: educate, educate, educate.
Better Regulation = Better Investments
From voting rights to marriage equality, it has been strong legislation combined with strong public advocacy that have led to lasting changes in society.
As crypto investors, it is in our best interest to push for better laws around digital assets: it will be rocket fuel for the crypto industry in America. Look how crazy everyone is going over the approval of a bitcoin ETF: now imagine if the entire industry is approved!
We’ve already got a bill on the table. It’s got bipartisan support. Let’s get this done, people.
Griping about the SEC has gotten us nowhere. It’s time to take our complaints to Congress.
Health, wealth, and happiness,
John Hargrave
Publisher, Bitcoin Market Journal
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