Charles Hoskinson, the CEO of IOG, who created Cardano (ADA) and co-founded Ethereum (ETH), has recently commented on the lawsuit filed by the United States Securities and Exchange Commission (SEC) against Ripple, the San Francisco-based cross-border payment firm, for allegedly selling XRP as an unregistered security.
The lawsuit was filed by the SEC in December 2020. Considering the new timeline of the lawsuit shared a few weeks ago by James K. Filan, the lawsuit may not be concluded until March 2023.
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Crypto Regulation through Enforcement Instead of Legislation
In a recent interview with BitBoy Crypto, Charles Hoskinson pointed out that regulations shouldn’t operate on a case-by-case basis, which would subject everyone to living in fear. He added that regulation is supposed to go through legislation and not enforcement.
Hoskinson also said the SEC’s current tactic will have a negative impact on the growth of the industry in the United States. He’s of the opinion that the approach could force crypto-based companies out of the country.
Charles Hoskinson noted:
“It’s just an example of what happens when you do regulation through enforcement instead of legislation… You should have clear, understandable standards. And there should be a clear process for people to adhere and comply with those standards. For example, with the Ethereum crowd sale in Switzerland, we just asked the Swiss government, and after a few weeks of haggling, they told us what to do, and we had a thing, and it was over.
“The SEC tends not to issue no-action letters in a meaningful way for the industry. So there’s no real good means of interfacing and integrating, and in the absence of that, people have different opinions, and there are winners and losers, and sometimes people get away with crazy stuff.”
“I think it [the SEC] creates perverse incentives inside the marketplace and ultimately, regulatory arbitrage, because basically those jobs go to Singapore, and they go elsewhere. So I don’t like the destruction of American jobs, the inconsistent clarity, the changing administrations having a big influence on the change of policy.
“There should be universal standards and there should be universal definitions, and hopefully, this case resolves in a way that’s good for the industry, but it’s just an indication of what happens in the absence of good leadership.”