John Berlau, a senior fellow at libertarian think tank Competitive Enterprise Institute, criticized the Securities and Exchange Commission’s () approach to regulating . Berlau delivered his comments in a report on April 11.
In a report called “ and the ’s Limitless Power Grab: Why Speculative Consumer Goods Are Not ‘Securities,’” Berlau claimed that technology and are transformative innovations, potential of which has been stunted by “burdensome .”
Berlau stated that “among federal financial regulatory agencies, none poses a greater threat to and the associated technologies than the Securities and Exchange Commission.” He argued that the government’s crackdown on the technologies prevents entrepreneurs from experimenting with novel approaches and applications.
Berlau further argued that the ’s scrutiny could threaten the functionality of tech if the agency deems a “security.” He stated that the ’s regulatory approach to could harm retail investors:
“Deeming as a ‘security’ could put out of the reach of middle-class investors because of the same red tape — both from regulations and from financial laws such as the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2010 — that has hindered small investors’ access to stock in early stage growth companies.”
The report continues by criticizing the used by the and Supreme Court to define whether transactions qualify as “investment contracts.” Berlau stated that the test gave the agency “the power to regulate many as securities,” thus allowing it to take more drastic measures toward than other .
Earlier in April, the a guidance document dubbed “Framework for ‘Investment Contract’ Analysis of Digital Assets” in order to help market participants ascertain whether a digital asset is deemed to be an investment contract, and therefore a security.
Commenting on the document, Berlau stated that it “appears to stretch the Howey Test even further and broadens greatly what products could be considered securities.”
Earlier this week, U.S. lawmakers the Taxonomy Act in the House of Representatives. Should the bill become law, it would exclude digital currencies from federal securities .
Published at Fri, 12 Apr 2019 00:57:39 +0000
