The discussion around cryptocurrency regulation has taken a new turn as Stuart Alderoty, a top lawyer for Ripple, took to Twitter to highlight contradictory statements from the Securities and Exchange Commission (SEC) and Treasury Secretary Janet Yellen.
In a recent court proceeding involving Coinbase, the SEC referred to the cryptocurrency market as a “rounding error” in the grand scheme of the global capital markets and asserted its authority over the sector.
In stark contrast, Yellen urged Congress just a day prior for new legislation to address the regulatory gaps in the cryptocurrency domain.
Yellen calls for urgent crypto regulation
Against the backdrop of the FTX exchange collapse and increasing vulnerabilities in the digital asset space, Treasury Secretary Janet Yellen has urged Congress to swiftly enact new legislation to regulate the cryptocurrency market.
As reported by U.Today, Yellen has pinpointed a significant regulatory void, particularly emphasizing the need for explicit legal frameworks to govern the spot market for digital assets not classified as securities.
The proposed Financial Innovation and Technology Act is one such legislative effort aiming to give federal regulators clear oversight over digital asset markets, intending to enhance customer protection and market integrity.
Coinbase challenging the SEC
In a Manhattan federal court, Coinbase and the SEC engaged in a legal battle that could set a precedent for the classification of digital assets. The heart of the debate is whether cryptocurrencies such as Solana, Cardano, and Polygon, traded on Coinbase and deemed investment contracts by the SEC, should be registered as securities.
Coinbase contests this notion, arguing that crypto assets do not fit the traditional definition of an investment contract.
The SEC’s lawsuit extends beyond token offerings, targeting the exchange’s ‘staking’ programs, which the agency argues should be registered.