SEC’s Attempt to Police Crypto Markets Challenged by Paradigm Counsel

SEC Pursuing Crypto Exchange Bittrex

Rodrigo Seira, Special Counsel of crypto investment firm Paradigm, has recently expressed his discontent with the United States Securities and Exchange Commission (SEC) for “wrongfully” attempting to regulate crypto exchange Bittrex, a secondary crypto market.

Paradigm filed an amicus brief on July 7, claiming that the SEC had overstepped its jurisdiction. Seira’s July 11 Twitter thread echoed this opinion, referencing SEC Chairman Gary Gensler’s previous admission that crypto exchanges lacked an adequate regulatory framework.

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Crypto-Assets and the SEC

Seira made similar observations in a July 7 blog post, noting that crypto-assets do not involve “investment contracts” and thus do not fall under the authority of the Securities and Exchange Commission (SEC). As a result, “the digital-assets industry is stuck in limbo, simultaneously told to ‘come in and register’ yet having no effective means of doing so.”

The SEC first filed a complaint against Bittrex on April 17, and the exchange surrendered its Florida money transmitter license on April 30 before eventually filing for bankruptcy on May 8.

Deso Crypto and Paradigm have offered their support to crypto organizations facing legal action from the SEC. This is the second time that Paradigm has done so.

On May 11, Paradigm petitioned to file an amicus brief in support of Coinbase which argued that the SEC had not provided clear regulations or guidance for digital asset firms in the U.S.

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