Former US congressman criticizes SEC approach to cryptocurrency

16 Jan, 2019
by Joeri Cant
Regulation
Former US congressman criticizes SEC approach to cryptocurrency

Former US Congressman George Nethercutt, a Republican member of the United States House of Representatives from 1995 to 2005 and cryptocurrency supporter, is criticizing the current approach of SEC by saying that they are holding back progress and innovation of this vital sector.

The founder and chairman of Nethercutt Consulting LLC wrote that the SEC is damaging the progress and innovation of the cryptocurrency industry.

He said that when the U.S. government takes a stand for American innovation, companies will reap the benefits of more strict enforcement of their developments.

However, Nethercutt is criticizing the current approach of the government by pointing out the the SEC is not fostering technological development in any way.

'While diplomats at the State Department are negotiating hard to pave the way for American innovation, US regulators such as the Securities and Exchange Commission (SEC) have been slow to make pronouncements regarding cryptocurrencies… This has hampered innovation and left many American businesses in regulatory limbo, particularly with respect to whether or not their tokens are classified as securities.'

For Nethercutt, the outdated SEC laws dating back to the 1930s are not compatible with modern cryptocurrencies. He wrote: 'From a legal perspective, experts have concluded that securities regulations simply do not apply to cryptocurrencies.'

'Cryptocurrencies and the underlying blockchain technology should be neither feared nor dismissed. While certain bad actors may be taking advantage of crypto in the short term, they represent a tiny fraction of the total users and applications of these technologies.'

'These innovations shouldn’t be hijacked by others, nor should they be strangled by poorly considered regulation.'

Read more: Cryptocurrency is SEC top priority for 2019

The SEC has been accused before of having a negative impact on the cryptocurrency industry. Mainly Republican lawmakers pointed fingers at the SEC, claiming that the massive crackdown on ICOs was detrimental to innovation.

Current democrat Congressman for Florida Darren Soto, recently said that the SEC might be off limits when trying to regulate cryptocurrencies.

Soto seems to think that the SEC should only be resorted to for the case of what he deems as “true securities”, as he believes that crypto finance is mostly composed of commodities and currency transactions.

It remains to be seen what kind of influence Nethercutt and his former colleagues may have on the SEC.

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