- The US Securities and Exchange Commission’s (SEC) Commissioner Caroline Crenshaw has banned multiple cryptocurrency-related lawsuits, saying the move is unprecedented and disregards long-standing legal norms. Crenshaw emphasized the need for continued enforcement of the SEC’s authority over crypto and suggested rejecting the idea of ending crypto enforcement until new regulations are developed.
- Crenshaw criticized the SEC’s stance that memecoins do not qualify as securities under federal law, arguing there’s no legal foundation for their designation. She questioned the security law’s lack of clarity when defining memecoins as speculative assets influenced by online trends, which could be highly susceptible to manipulation.
- Crenshaw called for a more robust regulatory framework for memecoins, suggesting that a clear definition of these assets is crucial. She noted that even assets like graphene might face market manipulation tactics, citing the Howey test and real estate projects as examples of regulated assets. However, she highlighted that theHowey test focuses on economic realities rather than branding, which could mitigate this severity.
- She also criticized the SEC’s guidance on calculating price volatility during periods of market manipulation. Crenshaw argued that this approach seems to ignore managerial efforts and leads to unreliable price movements. She warning that project teams and external influencers could manipulate cryptocurrency markets, raising concerns about transparency and security.
- In response, Crenshaw concluded that the SEC’s approach is insufficient for protecting investors and upholding financial market integrity. She argued that the agency’s assumptions are based on flawed legal understanding and that reliance on insufficiently defined assets could harm both borrowers and lenders. She recommended stricter monitoring frameworks and clearer definitions for memecoins and other crypto assets to enhance market regulation.
