The US security exchange commission has always been at the receiving end of a lot of criticism, from people blaming the SEC of not doing enough to overstepping. Recently, pro-crypto congressman Warren Davidson has came out blasting at SEC for delaying regulations regarding crypto. He is especially worried about the US being left behind as other countries are taking a crypto friendly approach attracting companies. This is not the first time the Congressman has come out in support of crypto, but this time he called the SECs approach to crypto a third world approach.
Warren Earl Davidson
Warren Earl Davidson is a Republican congressman from Ohio’s 8th congressional district. His journey to the US Congress is similar to many politicians in the country. He was born in Sidney, Ohio and joined the army after graduating high school. From there, he went to attend the United States Military Academy at West Point and graduated. After 12 years of service, he retired from the army after which he went on to get an MBA from the University of Notre Dame. He graduated from the Military Academy with a major in history and this obsession with history lead to an obsession with the principles instilled in the Declaration of Independence and the checks and balances defined in the Constitution, leading him to be a strong opponent of government interference in business and innovation. This occasionally leads him to criticise the government.
Bill HR 2144
Earlier in 2018 Warren Davidson tried to introduce a bill in congress that, if passed would allow ICOs to sidestep the SEC regulation. The bill will classify ICOs as a product and not as a security, this will allow ICOs to escape SEC oversight even at the state level. This will enable ease of doing business with crypto. Although the bill has not been introduced yet, it goes to show the extend with which Davidson supports the industry. The incoming democratic majority is sighted by many as the reason why the bill is getting delayed. Most democrats are not that enthusiastic with crypto as Davidson.
This time around, Davidson came out in a more confrontational manner, with him calling out SEC over the non-approval of bitcoin ETF. According to the Congressman, the ETF should have been approved a long time ago, and he doesn’t see any reason as to why the SEC is not giving approval now. He went on to add, “This is a third-world, developing-economy kind of approach, [where] if you want to launch a company, you go negotiate with the government. And maybe you can get your deal, and maybe your deal is different from this other person’s deal”. Davidson points out that the SEC policy has forced many companies to move offshore, putting the US at a disadvantage. Szczepanik, the SEC’s Senior Adviser for Digital Assets reacted to the allegations by saying that the SEC has been quite clear about crypto, especially after 2017. But he admitted that blockchain and crypto is a new field that is rapidly evolving, and that the SEC lags behind the industry.
US regulators always had a different type of approach towards the financial market, unlike Europe where there is a ton of regulation. The US has few laws but greater enforcement. Another peculiar thing about US law is the idea of minimal government, which also means that the government will not interfere unless it is necessary, leaving the markets free to develop as they wish. This is exactly what’s happening. The SEC has not been blind towards crypto. When ICOs were booming and a lot of scams happened, SEC stepped in and prosecuted a few of them. SECs inaction might be a sign that the regulatory body doesn’t see a need to step in. At first glance, the SECs approach might seem horrible, but even those in the crypto community cannot agree on the future. In such a scenario, it is better to sit back and watch, stepping in only when necessary. This is way better than how China or India handled it.
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