Brian Quintenz, the head of policy at Andreessen Horowitz and a former Commodity Futures Trading Commission (CFTC) commissioner, said that if the U.S. Securities and Exchange Commission (SEC) continues targeting crypto companies, the U.S. could lose out on the benefits that blockchain technology could bring to multiple industries.
“Let’s be clear about the consequences of these unilateral decisions," Quintenz said on Twitter. "Blockchain technology and Web3 have the potential to democratize a variety of industries. But for that innovation to happen here in the U.S., the government must provide rules to follow, not just lawsuits.”
The SEC filed lawsuits against Binance and Coinbase last week, the largest crypto exchanges in the world and in the U.S., respectively, according to an SEC news release. One lawsuit alleges that Coinbase should have registered as an exchange with the SEC. The other accuses Binance of offering unregistered securities and permitting U.S. customers to use the global Binance platform instead of restricting them to its U.S.-based platform, according to the SEC website.
During a June 13 House Financial Services Committee hearing on "Providing Clarity for the Digital Asset Ecosystem," Dr. Emin Gün Sirer, the founder and CEO of Ava Labs, highlighted several use cases for the blockchain technology that underpins cryptocurrency during his testimony.
"Blockchains can perform supply-chain management to provide a reliable and transparent record of a product's origin and authenticity," Sirer said. He also highlighted the potential for blockchain-based ledgers to streamline processes like insurance payouts after natural disasters. He pointed to Hurricane Katrina and Superstorm Sandy as two examples. "In 2019, the U.S. government completed the accounting for Hurricane Katrina disbursements a full 14 years after its catastrophic impact in 2005. The delays stemmed partly from the difficulty of achieving agreement among the many stakeholders participating in this process," Sirer said.
In a February Senate Banking Committee hearing on digital assets, Professor Linda Jeng of Georgetown University's Law Center said that "part of what excites" her about crypto is its "social value," which she said she's already seeing in action today, according to a transcript of her testimony.
"A substantial percentage of adults around the world today lack access to basic banking and financial opportunities. An oft-cited World Bank report found that 1.4 billion people worldwide are unbanked (i.e., do not have a bank account)," Jeng said. "Digital assets, which have lower barriers to entry and do not suffer from a legacy of exclusionary practices and stigmas, offer people from historically-excluded or unbanked/underbanked communities new access to secure, low-cost, and effective financial services—and members of those communities have already shown a strong interest in and adoption of digital assets."
Binance responded to the SEC's lawsuit in a blog post, saying, "Unfortunately, the SEC’s refusal to productively engage with us is just another example of the Commission’s misguided and conscious refusal to provide much-needed clarity and guidance to the digital asset industry."
Coinbase CEO Brian Armstrong said in a tweet in response to the lawsuit against his company that Coinbase is "proud to represent the industry in court to finally get some clarity around crypto rules."
