The U.S. Securities and Exchange Commission (SEC) is pushing for a federal appeals court to examine a question causing strife in the cryptocurrency industry: should its issuers be obligated to register under federal law? This issue of registration is central to the government’s stance against crypto trading and has been viewed as an enforcement tool following attempts to mitigate fraud in the sector. This approach has resulted in several digital asset companies looking at opportunities overseas, following a lack of clear guidelines from regulators or congress. However, a ruling by a judge in the Southern District of New York has given a slight reprieve to crypto traders, a move the SEC wishes to overturn with the support of the Second Circuit Court of Appeals.
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“If your company is under enforcement investigation, to see smart judges disagree, it could give the company the idea to fight it,” said Parvin Daphne Moyne, white collar partner at Akin Gump Strauss Hauer & Feld. The lack of decisive regulation in the U.S., according to Moyne and many others in the legal field, continues to strain the market.