Anthony Scaramucci Calls for an End to the SEC’s War on Crypto

Scaramucci, founder of SkyBridge and a prominent advocate for financial innovation, has expressed concerns about the ongoing tension between the U.S. government and the cryptocurrency industry.

He argues that this conflict needs to end, emphasizing the need for public servants who prioritize fairness and innovation over obstruction, particularly in crypto regulation. Scaramucci highlights that regulating crypto firms is a complex issue requiring thoughtful legislation.

He criticizes the current regulatory framework as dysfunctional, suggesting that under Chair Gary Gensler, the Securities and Exchange Commission (SEC) is pursuing an anti-crypto agenda that goes beyond its regulatory duties, using its power to delay and obstruct the industry’s progress.
A Broken System

According to Scaramucci, the SEC has traditionally avoided compromising its credibility through appellate losses, but the current leadership has diverged from this path. He contends that whether or not Gensler likes Bitcoin, the decision to invest in it should belong to individuals.

Scaramucci claims the SEC’s stance reflects a broader culture of bad faith toward crypto, as evidenced by the approval of spot Bitcoin ETFs in January after years of applications by industry participants. He points out that the court labeled the SEC’s previous rejections as “arbitrary and capricious,” forcing Gensler to approve a Bitcoin ETF he initially sought to block.

Scaramucci notes that these ETFs, offered by reputable firms like BlackRock, Fidelity, and Franklin Templeton, provide a secure and straightforward way for U.S. investors to engage with Bitcoin. He states they meet the SEC’s investor protection standards and benefit the investors the SEC aims to protect, with Bitcoin ETFs amassing $61 billion in assets just three months after their introduction.

Regulatory Missteps

Scaramucci also highlights the SEC’s handling of DEBT Box as another example of overreach. He mentions that a federal judge accused the agency of “gross abuse of power” in securing a temporary restraining order against DEBT Box, leading to the resignation of two SEC attorneys.

He describes this action, taken without prior notice to DEBT Box, as a breach of the court’s trust. Scaramucci argues that such actions underscore the urgent need for open dialogue between regulators and the crypto community. He believes many crypto-related issues could be addressed amicably if regulators engaged constructively with the industry.

He recalls that in 2021, Coinbase CEO Brian Armstrong noted the SEC was the sole governmental body refusing meetings with his company, leading to litigation over issues that could have been resolved in good faith.

Scaramucci Calls for Clarity

Scaramucci discusses the situation that worsened when Gensler testified before Congress in April 2023, avoiding questions about Ethereum (ETH) — crypto’s second-largest asset.

He points to documents from the Consensys lawsuit revealing that the SEC was investigating ETH just before Gensler’s testimony. He cites Representative Patrick McHenry (R-NC), who criticized Gensler’s evasive testimony as an intentional misrepresentation of the SEC’s stance.

#ICYMI: New court filings indicate that @SECGov Chair Gary Gensler knowingly misled Congress when pressed on the classification of #ETH at a @FinancialCmte hearing to conduct oversight of his agency.

📖 Read my full statement 👇 pic.twitter.com/8osMpbY6Iu

— Patrick McHenry (@PatrickMcHenry) April 30, 2024

Scaramucci notes that while Ethereum boasts a market value of $457 billion, the SEC remains silent on its classification, even as the Commodity Futures Trading Commission (CFTC) declared Ethereum a commodity, raising questions about inter-agency communication.

He argues that if the SEC deems Ethereum a security, clarity is essential for the industry’s growth, and suggests Gensler has a separate agenda supported by Senator Elizabeth Warren, founder of the so-called “anti-crypto army,” a minor and unpopular faction.

Why Crypto Matters

Scaramucci emphasizes that crypto matters because it represents a transformative shift that the U.S. typically pioneers. He explains that crypto channels capital and talent into overcoming barriers, exemplified by the US dollar stablecoin, a digital currency with over $140 billion in circulation, which disrupts traditional banking, facilitates global dollar transactions, and benefits all Americans.

To foster this innovation, Scaramucci calls for regulators to engage constructively with industry leaders. He asserts that it’s time to move beyond unwarranted regulatory roadblocks, advocating for meaningful reform and a departure from the current SEC leadership’s approach.

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