Title: Paradigm Reports on SEC Registration Issues in the US

According to reports, Web3 venture capital firm Paradigm published a policy article today on SEC registration issues in the United States. The article states that US SEC Chairman Gary Gensler “attempted to forcibly include encrypted assets that may not even constitute ‘securities’ in an inappropriate disclosure framework, which is a bad policy.” The agency pointed out that the SEC failed to provide users and investors of encrypted assets with the information they needed, and also denied the SEC’s claim that the regulatory agency provided a feasible compliance path for crypto entrepreneurs. Paradigm stated that the current information disclosure policy was formulated in the 1930s long before the emergence of the internet, and the current policy is “tailored for centralized companies issuing securities,” while the crypto market is fundamentally different. The institution added that securities provide holders with legal rights over centralized entities, however, most cryptocurrencies do not have “legal rights” and only have “technical capabilities in the protocol”. （Cointelegraph）

Paradigm: The US SEC’s attempt to regulate encryption is a “bad policy”

Introduction

Web3 venture capital firm Paradigm published a policy article on SEC registration issues in the United States. The article sheds light on the challenges faced by crypto entrepreneurs in complying with US SEC regulations. The article highlights the failure of the SEC to provide clear guidelines on the registration of encrypted assets, referring to them as a ” bad policy.”

History of SEC Registration Policies

According to Paradigm, the current information disclosure policy was formulated in the 1930s long before the emergence of the internet. The current policy is “tailored for centralized companies issuing securities” and does not account for the fundamental differences in the crypto market. The lack of clarity and outdated policies have resulted in the SEC failing to provide users and investors of encrypted assets with the information they need.

Gary Gensler’s Inappropriate Disclosure Framework

The article cites US SEC Chairman Gary Gensler’s attempts to forcibly include encrypted assets that may not even constitute ‘securities’ in an inappropriate disclosure framework. The SEC’s actions are a clear indication of the agency’s failure to understand the nature of encrypted assets and how they differ from traditional securities.

Legal Rights Over Centralized Entities

Paradigm highlights that securities provide holders with legal rights over centralized entities; however, most cryptocurrencies do not have “legal rights” and only have “technical capabilities in the protocol.” The inherent differences in crypto assets make it challenging to comply with registration requirements tailored for traditional securities.

Feasible Compliance Path for Crypto Entrepreneurs

The SEC’s claims of providing a feasible compliance path for crypto entrepreneurs have been met with skepticism. While the regulatory agency may have provided some guidance, the lack of clarity and outdated policies mean that compliance remains a significant hurdle for crypto entrepreneurs.
# Conclusion
The article by Paradigm shines a light on the regulatory hurdles faced by crypto entrepreneurs in the United States. The SEC’s outdated policies and lack of clear guidance on the registration of encrypted assets have made it challenging for users and investors to make informed decisions. The agency’s attempts to apply registration requirements tailored for traditional securities to crypto assets are a clear indication of its failure to understand the fundamental differences between the two.
# FAQs
Q1. What is the current SEC policy on encrypted assets?
A1. The current SEC policy is outdated and tailored for centralized companies issuing securities, making it challenging for crypto entrepreneurs to comply with the registration requirements.
Q2. What are the fundamental differences between securities and cryptocurrencies?
A2. Securities provide holders with legal rights over centralized entities while most cryptocurrencies do not have “legal rights” but only have “technical capabilities in the protocol.”
Q3. Does the SEC provide clear guidelines on the registration of encrypted assets?
A3. No, the SEC has failed to provide clear guidelines on the registration of encrypted assets, resulting in a lack of clarity and difficulty in compliance for crypto entrepreneurs.