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USDC Issuer Circle Refutes SEC Enforcement Action FUD
Following the SEC's crackdown on Kraken last week and subsequent threat of action against BUSD issuer Paxos, rumors began circulating that Circle was next. Crypto Twitter was flooded with baseless claims that Circle received a Wells notice from the SEC. A notice from Wells is a threat of legal action that gives the firm time to formulate a response, in this case justifying that a stablecoin is not a security (which is pretty obvious). However, Chief Strategy Officer and Head of Global Policy at CirclePay, Dante Disparte, refuted the rumors on February 15. .@Circle has...
USDC Issuer Circle Refutes SEC Enforcement Action FUD
Following the SEC's crackdown on Kraken last week and subsequent threat of action against BUSD issuer Paxos, rumors began circulating that Circle was next.
Crypto Twitter was flooded with baseless claims that Circle received a Wells notice from the SEC. A notice from Wells is a threat of legal action that gives the firm time to formulate a response, in this case justifying that a stablecoin is not a security (which is pretty obvious).
However, Chief Strategy Officer and Head of Global Policy at CirclePay, Dante Disparte, refuted the rumors on February 15.
. @Circle has received no communication from Wells. https://t.co/lE74zHVLka
— Dante Disparte (@ddisparte) February 14, 2023
The tweet was in response to a Fox News journalist who said the company had received the notice. The journalist apologized for the mistake, but by then the flow of FUD had started flowing.
CORRECTION: @Circle did not receive a Wells communication via @ddisparte and I sincerely apologize for the mistake. I strive to do things right, but I also want to admit when I'm wrong. I'm sorry.
– Eleanor Terrett (@EleanorTerrett) February 14, 2023
SEC targets stablecoins
The SEC's war on crypto knows no bounds as it now claims that staking services and stablecoins are securities. While the first may be questionable, the second is definitely pie in the sky and simply an overreach by the authority that regulates through enforcement.
DeFi and NFT founder ‘0xfoobar’ saw the humorous side of things:
Circle issued a “Reverse Wells Notice” to Gary Gensler. An Uno Reverse Card is a notice issued by companies to inform regulators that there are no violations. The SEC must stop all investigations until the lawsuit accusing it of regulatory overreach is resolved
— foobar (@0xfoobar) February 14, 2023
The crypto ecosystem is in turmoil this week following Wells' announcement to Paxos about issuing BUSD. Millions of dollars worth of stablecoins were redeemed or converted into other stablecoins following the promotion.
As a result, BUSD’s market cap has shrunk by almost $900 million in the last few days.
The future of crypto in the USA
On February 15, Blockchain Association Chief Policy Officer Jake Chervinsky stated, Sent his thoughts on the recent government raids.
“The recent spate of activity is shocking, but it is no surprise and does not spell doom for crypto in the US.”
He added that 2022 was the worst year in crypto history and FTX has tarnished the reputation of the entire industry.
Previously, Congress would have decided regulation, not the agencies, but with a divided Congress, watchdogs like the SEC are taking matters into their own hands.
“In return, the agencies are stretching their authority beyond recognition to ‘get things done’ without Congress, whether the law allows it or not.”
He concluded that no matter how many enforcement actions the SEC and CFTC take, they are bound by legal reality:
“Neither has the authority to comprehensively regulate crypto, neither can achieve it through any level of enforcement, and neither will ever have it without an act of Congress.”
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