The crypto industry has been on edge this week following the SEC’s threat of legal action against Paxos for issuing BUSD, a stablecoin. This has led to rumors that the SEC was also targeting Circle, another crypto firm, with a Wells notice. However, those rumors were quickly debunked by Circle’s Chief Strategy Officer, Dante Disparte. The SEC’s recent flurry of activity has been seen as an attempt to regulate crypto without the help of Congress, due to the divided state of the legislative body.
The SEC’s actions have caused the market capitalization of BUSD to shrink by almost $900 million in the past couple of days. This has been seen as a sign of the SEC’s overreach, as stablecoins are not considered securities. The Blockchain Association’s Chief Policy Officer, Jake Chervinsky, has commented on the situation, saying that the SEC and CFTC are stretching their authority beyond recognition in order to “get things done” without Congress. He also noted that no amount of enforcement will ever give the agencies the authority to comprehensively regulate crypto without an act of Congress.