SEC’s crypto approach a ‘disaster for the whole industry’

In a candid interview with Maria on Fox Business’ Mornings, SEC Commissioner Mark Uyeda harshly criticized the agency’s crypto transactions and acknowledged that its current strategy is “a disaster for the entire industry.”

Uyeda’s remarks come amid mounting legal challenges, including a new lawsuit filed by Crypto.com against the U.S. Securities and Exchange Commission following the publication of the Wells notice.

Crypto.com’s lawsuit alleges that the SEC overstepped its jurisdiction by imposing regulations on the cryptocurrency market without issuing clear regulatory guidance. The Wells notice, a formal notice indicating that enforcement action by the SEC is likely, accused Crypto.com of operating as an unregistered broker-dealer and securities clearing house for its handling of tokens that the SEC considers to be securities.

Uyeda’s criticism of the SEC’s approach underscores a growing frustration with the agency and the crypto industry more broadly.

“We are submitting this ‘policy through enforcement,'” Uyeda said, referring to the SEC’s practice of targeting companies with legal actions without providing clear guidance on how they should operate under existing regulations. “We have done nothing to provide guidance on this,” he continued. “Ultimately, this situation was shaped by the courts. And different courts ruled in different ways.”

In fact, the SEC’s reliance on enforcement has led to legal battles, including a high-profile lawsuit against Ripple Labs.

Courts have often issued mixed decisions, increasing uncertainty for crypto firms. Although the SEC recently lost a major decision regarding the classification of XRP tokens to Ripple (XRP), the agency has already filed an appeal, signaling that these legal battles are far from over.

Crypto firms are struggling

Crypto.com’s lawsuit is just the latest in a series of legal clashes between the crypto industry and the SEC. The lawsuit filed upon Wells’ notice claims that the agency made regulations beyond its authority. Crypto.com’s leadership insists that legal action is necessary to protect the future of cryptocurrency innovation in the United States.

Mark Uyeda declined to comment directly on the Crypto.com case, but emphasized that the issue of the SEC’s failure to provide clarity is broader. “We have not provided interpretive guidance on what you can and cannot do,” Uyeda said, adding that the lack of clear rules leaves companies guessing about how to comply with securities laws.

Uyeda’s comments also touched on the SEC’s broader regulatory philosophy, particularly regarding environmental, social and governance mandates. He criticized the agency’s focus on ESG issues, arguing that such efforts often stray from fiscal relevance. “This is about micromanaging a lot of things that companies do on things that have absolutely no financial purpose,” he said, adding that financial regulators should not be vehicles for social change.