Rumors have been circulating that Circle will follow the SEC’s raid on Kraken last week and its accompanying threat to take legal action against BUSD issuer Paxos.
Crypto Unfounded rumors that Circle had received a Wells notice from the SEC were widely circulated on Twitter. A Wells notice serves as a warning of impending legal action, allowing the company the opportunity to prepare a defense, in this example, arguing that a stablecoin is not a security.
However, on February 15, CirclePay’s Chief Strategy Officer and Head of Global Policy, Dante Disparte, denied the reports. The tweet was a retweet of one from a Fox News reporter who claimed the company had already received the notification. When the journalist realized his error, the river of FUD had already started to flow.
The SEC’s battle against cryptocurrency knows no bounds, as it now asserts that stablecoins and staking services are securities. While the first may be debatable, the second is unquestionably wishful thinking and just overreaching on the part of the agency that enforces regulations.
Following the Wells notice delivered to Paxos on the issuance of BUSD, the cryptocurrency world is on edge this week. Following the action, stablecoins worth millions of dollars were redeemed or changed into other stablecoins.
As a result, over the past few days, the market value of BUSD has decreased by over $900 million. Jake Chervinsky, the Blockchain Association’s chief policy officer, shared his opinions on the most recent regulatory crackdowns on February 15.
“The recent flurry of activity is jarring, but it’s not a surprise and it doesn’t spell doom for crypto in the USA.”
He continued by saying that 2022 was the worst year in cryptocurrency history and that FTX had damaged the standing of the entire sector.
In the past, Congress rather than the agencies would have made the decisions about regulation; but, in light of the split Congress, watchdogs like the SEC are taking matters into their own hands.
“In turn, the agencies are stretching their authority beyond recognition to “get things done” without Congress, whether the law allows it or not.”
He concluded that the SEC and CFTC are constrained by legal reality no matter how many enforcement proceedings they bring:
“Neither has the authority to comprehensively regulate crypto, neither can obtain it through any amount of enforcement, and neither will ever have it without an act of Congress.”
