Caroline Crenshaw, chairman of the U.S. Securities and Exchange Commission and voice code critic Caroline Crenshaw, accused U.S. regulators of downplaying the risks and misrepresenting the US stubcoin market with newly released guidelines.
However, many people in the crypto industry are viewing the new SEC guidelines as a step in the right direction, in which stubcoins that meet certain criteria are now considered “non-proof” and are exempt from transaction reporting requirements.
In a statement on April 4, Crenshaw, widely known for opposing the Bitcoin ETFS spot, said the SEC statement on STABLECOINS contained “legal and de facto errors in drawing a distorted picture of the USD stubcoin market that assesses risk significantly.”
Crenshaw disagrees, crypto industry praises
Crenshaw disputed the accuracy of the analysis the SEC made in reaching that decision. She pushed the SEC back to repeat the issuer’s actions that “stabilize prices, ensure redemption potential and reduce other risks.”
Source: David Sacks
The SEC said, “Although temporary, some USD stable coins are available to retail buyers only through intermediaries, not directly from the issuer.”
Crenshaw argued that this was misleading. She said:
“No exceptions, the general rule is that these coins are only available to retailers through intermediaries selling them in secondary markets, such as crypto trading platforms.”
“Over 90% of USD stable coins in circulation are distributed this way,” Crenshaw added.
Meanwhile, many in the crypto industry have expressed optimism about clearer guidance on stubcoins.
“It feels like a clear step towards focusing on what’s really important in the crypto space,” said Ian Ballina, founder of Token Metric.
Crypto Industry says a positive step just behind
Vemanti CEO Tan Tran said he wanted the SEC to reach this point three years ago, but Ian Kane, head of partnerships at Midnight Network, said “it feels like progress from people at Crypto who are trying to play by the rules.”
Crenshaw said it was “sadly inaccurate” for the SEC to reassure users that the issuer could handle unlimited reimbursements simply because reserves match or exceed the value of the supply.
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“The issuer’s overall financial health and solvency cannot be judged by the value of its equipment, which tells us nothing about its liabilities, the risks of its own financial activities, etc,” Crenshaw said.
She explained that stubcoin always has some risk, especially during the market slump.
Stablecoin Issuer Tether reportedly worked with Big Four accounting firms to audit the asset reserves and ensure that USDT Stablecoin was supported by a 1:1 ratio.
On March 22, Cointelegraph reported that Tether CEO Paolo Ardoino said the auditing process would be easier under President Donald Trump.
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