SEC paints 'a distorted picture' of USD-stablecoin market — Crenshaw

US Securities and Exchange Commission (SEC) Commissioner and vocal crypto professional Caroline Crenshaw has accused the US regulator of downplaying risks and misrepresenting the US stablecoin marketplace successful its recently published guidelines.

However, galore successful the crypto manufacture spot the SEC’s determination arsenic a measurement successful the close direction.

In an April 4 statement, Crenshaw, wide known for opposing the spot Bitcoin ETFs, said that the SEC's connection connected stablecoins contained "legal and factual errors that overgarment a distorted representation of the USD-stablecoin marketplace that drastically understates its risks."

Crenshaw disagrees, crypto manufacture applauds

Under the caller SEC guidelines, stablecoins that meet definite criteria are present considered "non-securities" and are exempt from transaction reporting requirements.

Crenshaw disputed the accuracy of the investigation made by the SEC successful arriving astatine that decision. She pushed backmost connected the SEC for reiterating issuer actions "that supposedly stabilize price, guarantee redeemability, and different trim risk."

Source: David Sacks

The SEC said that "albeit briefly, that immoderate USD-stablecoins are disposable to retail purchasers lone done an intermediary and not straight from the issuer."

Crenshaw argued this was misleading. She said:

"It is the wide rule, not the exception, that these coins are disposable to the retail nationalist lone done intermediaries who merchantability them connected the secondary market, specified arsenic crypto trading platforms."

"Over 90% of USD-stablecoins successful circulation are distributed successful this way," Crenshaw added.

Meanwhile, galore successful the crypto manufacture expressed optimism implicit the decision.

Token Metrics laminitis Ian Ballina said it “feels similar a wide measurement successful focusing connected what truly matters successful the crypto space.”

Crypto manufacture says affirmative step, conscionable late

Vemanti CEO Tan Tran said helium wished the SEC reached this constituent 3 years ago, portion Midnight Network’s caput of partnerships Ian Kane said it “feels similar advancement for crypto folks trying to play by the rules.”

Crenshaw said it is "also grossly inaccurate" for the SEC to reassure users that an issuer has capable reserves to fulfill unlimited redemption requests conscionable due to the fact that its reserve is valued "at oregon supra the par worth of its outstanding coins."

Related: Stablecoins' successful bull market'; Solana sputters: VanEck

"The issuer's wide fiscal wellness and solvency cannot beryllium judged by the worth of its reserve, which tells america thing astir its liabilities, hazard from proprietary fiscal activities, and truthful forth," Crenshaw said.

She explained that stablecoins ever transportation immoderate risk, peculiarly during marketplace accent oregon erstwhile their terms begins to fall.

It comes lone weeks aft stablecoin issuer Tether was reportedly engaging with a Big Four accounting firm to audit its assets reserve and verify that its USDT stablecoin is backed astatine a 1:1 ratio.

On March 22, Cointelegraph reported that Tether CEO Paolo Ardoino said the audit process would beryllium much straightforward nether pro-crypto US President Donald Trump.

Magazine: XRP triumph leaves Ripple a 'bad actor' with nary crypto ineligible precedent set