SEC’s Stablecoin Move Welcomed by Crypto Industry, But Not by All
U.S. Securities and Exchange Commission (SEC) Commissioner Caroline Crenshaw has raised serious concerns about the agency’s latest stablecoin guidelines. While much of the crypto community sees the guidance as a positive development, Crenshaw argues it significantly downplays the risks involved in the USD-stablecoin market.
On April 4, Crenshaw released a statement criticizing the SEC’s stance, claiming it contains “legal and factual errors” that create a skewed picture of stablecoin safety. Known for her opposition to spot Bitcoin ETFs, Crenshaw remains one of the SEC’s most outspoken crypto skeptics.
New Guidelines Label Certain Stablecoins as Non-Securities
According to the new SEC framework, stablecoins that meet specific conditions are no longer considered securities and do not require transaction reporting. This decision was generally seen as a win by many in the digital asset space.
However, Crenshaw took issue with the SEC’s reasoning. She questioned the agency’s suggestion that issuers effectively maintain price stability and reduce risk, calling this an oversimplification of the situation.
She particularly criticized the SEC’s claim that some stablecoins are sold directly to consumers, countering that most are purchased through third-party platforms.
- Crenshaw pointed out that over 90% of USD-stablecoins in circulation are distributed via intermediaries like crypto exchanges.
- She argued that presenting this as a rare occurrence is misleading and gives a false sense of accessibility and transparency.
Crypto Leaders Applaud the Move as Long Overdue
Despite Crenshaw’s objections, several crypto industry figures praised the SEC’s decision.
- Token Metrics founder Ian Balina called it “a clear step in focusing on what really matters in the crypto space.”
- Tan Tran, CEO of Vemanti, expressed regret that this clarity didn’t come sooner.
- Ian Kane of Midnight Network saw the decision as progress for law-abiding crypto participants.
Crenshaw also challenged the SEC’s reassurances about stablecoin redemptions. She warned that matching reserves alone don’t guarantee financial strength or the ability to manage risk during downturns.
“The issuer’s reserve size doesn’t reflect liabilities or exposure from proprietary activities,” she said, emphasizing that stablecoins always carry some degree of risk.
This debate follows recent news that Tether is working with a major accounting firm to audit its reserves. The company aims to verify that its USDT token is backed 1:1, a move that could help boost confidence in stablecoin stability.
