Cryptocurrency consumer advocacy group rallies retail investors to push back on SEC crackdown
The Digital Currency Trader’s Alliance digital campaign is dubbed 'Stop the SEC'
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A small cryptocurrency consumer advocacy group is launching a campaign against the Securities and Exchange Commission and its crackdown on crypto, FOX Business has learned.
The Digital Currency Trader’s Alliance (DCTA) has launched an online advertising campaign calling on retail investors to lobby their congressional representatives to fight back against SEC Chairman Gary Gensler’s regulation by enforcement strategy, which, the non-profit group claims, is unfairly harming cryptocurrency retail investors.
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The campaign, dubbed "Stop the SEC", aims to help retail investors demand regulatory clarity from Congress and relief from SEC overreach.
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler, testifies before the Senate Banking, Housing and Urban Affairs Committee during an oversight hearing on Capitol Hill in Washington, U.S., Sept. 15, 2022. (Reuters/Evelyn Hockstein / Reuters Photos)
"We created this campaign to connect everyday consumers with their Congressional representatives so they can tell them firsthand how the SEC’s regulation by enforcement approach to crypto is hurting their investments," DCTA’s Deputy Director Kevin Trommer tells FOX Business.
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The SEC did not immediately respond to a request for comment.
On Tuesday, crypto exchange Coinbase announced it’s launching its own grassroots campaign called Crypto 435 aimed at advancing pro-crypto policies in all 435 Congressional districts across the U.S.
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The DCTA, founded by former political lobbyists Nate Bradley and Kevin Trommer, along with other public policy experts, says the campaign is a response to the myriad of enforcement actions from the SEC. The onslaught of lawsuits have been filed against members of the nascent industry, which has seen heightened scrutiny following the November collapse of now-defunct crypto exchange FTX and its founder Sam Bankman-Fried who has been indicted on charges of fraud.
Sam Bankman-Fried, co-founder of FTX Cryptocurrency Derivatives Exchange, arrives at court in New York, US, on Tuesday, Jan. 3, 2023. Disgraced crypto founder Bankman-Fried plans to plead not guilty to fraud after being charged with orchestrating a y (Photographer: Stephanie Keith/Bloomberg via Getty Images / Getty Images)
It’s no secret that Gensler has made it a priority to reign in the $1 trillion crypto industry. In 2022, the SEC brought 30 crypto-related actions, more than any other financial regulator. In the first two months of 2023, the agency has brought eight enforcement actions including those against U.S. crypto exchanges Kraken and Gemini and trading firm Genesis.
On Tuesday, online retail brokerage Robinhood revealed it had received an SEC subpoena in December related to its cryptocurrency operations following the collapse of FTX. The agency recently expressed concerns that stablecoin BUSD is an unregistered security, sparking a new level of uncertainty and confusion across the industry.
Stablecoins, which are pegged to stable asset classes like gold or the dollar, have become essential to the crypto market as they allow users to buy and sell various tokens without having to convert in and out of fiat currency.
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"Chair Gensler has subjected the crypto community to regulatory purgatory with little to no way to offer registered, compliant products and services in the United States," House Majority Whip Tom Emmer said in a statement to FOX Business. "We need to bring crypto firms into the United States’ safe and strong markets, not relegate them offshore, leaving investors vulnerable to insufficient regulatory safeguards."
FILE PHOTO: Representations of cryptocurrencies are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration (REUTERS/Dado Ruvic/Illustration / Reuters Photos)
Legally, the SEC does not have clear jurisdiction over the regulation of cryptocurrencies as there has been no formal classification that digital assets are securities by Congress or the courts. The ongoing legal battle between the SEC and blockchain technology company Ripple, which is expected to reach a conclusion later this year, is anticipated to set a precedent for the SEC’s authority over digital coin offerings.
The DCTA is hoping to use its campaign against the SEC as a springboard to get retail investors involved in the legislative process early while Congress is working on establishing guidelines.
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"The next few years will be the most critical when it comes to influencing potential crypto regulations," said DCTA advisory board member and lawyer John Deaton. "The SEC has abandoned the individual retail investor. We must represent ourselves by organizing and making sure our voices are heard."