Policy Watchdog Raises Concerns Over Lack of Transparency
The U.S. Securities and Exchange Commission (SEC) is under scrutiny after a prominent policy advocacy group raised objections to how the agency is currently handling cryptocurrency-related policy. In a formal letter, the group criticized the SEC’s cryptocurrency task force for relying on informal guidance documents rather than established regulatory processes.
SEC Accused of Sidestepping Public Review Process
One of the key concerns highlighted was that the SEC’s recent guidance—particularly around meme coins and other digital assets—was issued without undergoing the standard public comment and review process. This approach, according to the advocacy group, contradicts the principles of regulatory transparency that have been promoted by current leadership.
The bypassing of formal rule-making is seen as a threat to regulatory legitimacy and public trust.
Meme Coins Labeled ‘Collectibles’ — Legal Concerns Raised
A major point of contention was the task force’s February classification of meme coins as ‘collectibles’ instead of securities. The letter emphasized that this label lacks a clear legal foundation and may not accurately reflect the nature of such digital assets.
According to Benjamin Schiffrin, the group’s Director of Securities Policy, the speculative nature and extreme volatility of meme coins align more closely with the definition of securities under U.S. law.
Classifying them as collectibles could weaken investor protections and create regulatory gaps.
Call to Reinstate Formal Rule-Making Procedures
The advocacy organization is urging the SEC to immediately return to formal regulatory channels, ensuring that any classification or regulation of digital assets follows the standard notice-and-comment rule-making process.
Such a process allows public input, increases transparency, and ensures legal compliance.
Implications for the Crypto Industry
This latest development adds to growing tensions between regulators and the cryptocurrency industry. The use of informal policy tools may offer speed, but critics argue it lacks accountability and legal robustness. For crypto projects, investors, and exchanges, this raises uncertainty around compliance and enforcement.
Conclusion
The SEC’s approach to cryptocurrency continues to evolve, but its reliance on informal guidance has sparked concern from policy experts and market participants alike. With regulatory credibility on the line, the call for formal and transparent rule-making is growing louder.