Robinhood’s CLO Criticizes SEC’s ‘Scorched Earth’ Strategy to Crypto

• Dan Gallagher criticizes the SEC’s unclear regulatory method to cryptocurrency regulation.
• Robinhood held over 12 conferences with the SEC however acquired a Wells discover regardless of efforts.
• Gallagher requires a transparent, complete regulatory framework to help U.S. innovation.

Dan Gallagher, Robinhood’s Chief Authorized Officer and a former SEC Commissioner, testified earlier than the U.S. Home Monetary Companies Subcommittee on Digital Belongings. Whereby, he criticized the “scorched earth” method the SEC has on cryptocurrencies.

Gallagher disclosed that Robinhood had over a dozen conferences with the SEC in an effort to register, however nonetheless resulted in a Wells discover from the enforcement division.

Based on Gallagher, Robinhood to be registered as a digital asset broker-dealer underneath the SEC. Robinhood claimed to have devoted efforts and assets to implement the rules set by the Fee. They spent over a yr in search of steering from the SEC. Nevertheless, the SEC dismissed all of those devoted efforts; as an alternative, despatched a Wells discover to Robinhood.

Gallagher stated that the company had failed to supply suggestions to firms and due to this fact readability on the matter. Robinhood additionally had deliberate to function throughout the framework established by the SEC, limiting the cash it listed and excluding ICOs and proprietary buying and selling. Nevertheless, the SEC’s actions highlighted the problem of ambiguity surrounding the regulation of cryptocurrencies.

Learn additionally: Robinhood Acquires Bitstamp for $200 Million Regardless of SEC Lawsuit Menace

Considerations Over Regulation by Enforcement

Gallagher had additionally voiced issues on the enforcement-first method utilized by the SEC as an alternative of getting a algorithm to control digital belongings. He argued that is dangerous to American customers and in addition damping innovation.

Gallagher identified that different areas, such because the European Union, have supplied clear pointers that outline the authorized environments, encouraging resolution innovation. In distinction, the U.S. has by some means misplaced its place within the digital asset trade.

Current authorized selections questioning the SEC’s actions have been additionally a subject of the testimony. Gallagher talked about federal bench judges who criticized the company’s litigation method, which has launched biases into the method. This lack of path has precipitated confusion amongst providers working within the cryptocurrency market and end-users.

Name for Regulatory Framework

To make sure the right dealing with of digital belongings, Gallagher has urged Congress to create a regulatory construction. He famous that the SEC has had the authorized authority since 1996 to ascertain a short lived algorithm however has not achieved so. He advisable that the Fee may set normal pointers for platforms inquisitive about partaking within the buying and selling of digital belongings.

Gallagher’s testimony highlighted Robinhood’s efforts to adjust to SEC rules and his disappointment with the company’s present method. He referred to as for extra readability and a regulatory framework that helps innovation with out stifling development within the U.S. digital asset market.