The US Securities and Exchange Commission (SEC) has been known for its continued crackdown on the crypto industry over the last few years. This has prompted the likes of Cardano Founder, Charles Hoskinson, to give his opinion on the reason for the SEC’s actions.
SEC’s Move Against Crypto Is Political
During an interview with Corey Costa, Hoskinson suggested that the agency’s crackdown on the industry was politically motivated. He believes that the regulator isn’t trying to enforce securities laws but simply doing the bidding of the Democratic Party, who were trying to save face in the wake of the fall of disgraced FTX founder Sam Bankman-Fried (SBF).
SBF is known to have been one of the highest donors of the Democratic party between 2021 and 2022. Following SBF’s indictment, the Democratic Party was heavily criticized, with many politicians being called out for having close ties to him.
Given this, the Cardano founder hinted that the party was labeling every stakeholder in the industry as a bad actor to control the narrative.
Interestingly, Hoskinson’s belief that the SEC’s crypto crackdown is politically driven echoes the sentiments of a former SEC attorney, John Reed Stark, who stated that the SEC was likely to abandon its current approach should a Republican get elected as President next year.
Hoskinson further highlighted how the SEC’s intense regulatory pressure negatively impacts the economy, given that many entrepreneurs were forced to move their operations overseas, taking along job opportunities that citizens could benefit from.
Crypto exchange Bittrex happens to be one of such companies that have suffered from the SEC’s crackdown. In March this year, the company announced that it was winding down its US operations due to the “continued regulatory uncertainty” in the country.
SEC Not Coming For Cardano
When the SEC sued two of the world’s largest crypto exchanges, Binance and Coinbase, in June, it alleged that they offered unregistered securities on their platform, and Cardano’s ADA was one of the tokens that the regulator classified as a security.
However, Hoskinson stated that the SEC is coming for Cardano. Instead, he believes that his blockchain platform and its native token just happened to be in the crossfire of the back-and-forth battle between the SEC and some exchanges.
According to him, the fact that the SEC hasn’t made any direct enforcement against Cardano shows that the SEC doesn’t plan to crack down on his firm.
This position undoubtedly has a solid foundation, considering that the SEC has shown that it isn’t shy to come at blockchain firms or their tokens. Notably, the regulator is involved in a long-running legal battle against blockchain firm Ripple Labs as it has continued to allege that the XRP token is a security.