This was a recent article from REUTERS, Coinbase, SEC Lock Horns In US Court Over Crypto Securities
Here are a couple of points from the article:
- Judge Katherine Polk Failla on Wednesday heard arguments from both sides, focusing her questions on the legal precedent defining securities, and the attributes of several crypto tokens traded on COINBASE and elsewhere that the regulator has deemed investment contracts.
- The case is one of a slew the SEC has brought against the crypto sector. The agency focused initially on companies selling digital tokens, but under the leadership of chair Gary Gensler has targeted firms offering trading platforms and clearing activity, and acting as broker-dealers.
Now if you think I am going to give you a bunch of thoughts on why crypto is not a security or why Coinbase should win this case, I am not. Maybe in some other post, but, not today. This is a time when I dip my toes into a purely political train of thought, and that is this: Why is the SEC involved in this?
The US is governed by a representative government. Meaning quite simply, we send people to Washington through elections to govern us. No one voted on the SEC and I don't remember voting on Gary Gensler to run the SEC. Now, you may argue that the President was elected and he nominated the chair of the SEC and Congress, also elected, affirmed this nomination. You got me, except this, the the SEC was created in the aftermath of the 1929 Wall Street Crash to enforce the law against market manipulation. That is it, not to create statutes, make rules or determine securities, just to enforce the law.
If if the executive and legislative branches have not made it law, why is the SEC suing private companies over it? The Congress has sat back and allowed bureaucracies to create rules (de facto laws) to rule things that they should be managing themselves. In short, this is a question that Congress needs to decide, not the SEC and some judge in Manhattan. We don't even get a chance to argue if the guys we elected are right or wrong on this.
