By
Chimamanda U. Martha
July 4th, 2024
The SEC Commissioner criticized the Gensler-led agency’s approach to regulating crypto assets, particularly regarding the disclosure of information in Form S-1 filings.
Taking a jab at his own agency, the US SEC Commissioner Mark Uyeda lashed out at the agency’s approach to handling crypto disclosures while calling the generic approach of crypto asset filings “problematic”.
In a statement published on the SEC website on Monday, July 1, SEC Commissioner Uyeda announced new rules and form amendments for implementing the Registered Index-Linked Annuities (RILA) Act. He also mentioned the need to change some of the requirements in the way that specific firms file their Form N-4 applications.
At first glance, the statement seems entirely unrelated to crypto. However, hidden in the footnotes was a subtle critique of the Gensler-led agency’s approach to regulating crypto assets, particularly regarding the disclosure of information in Form S-1 filings.
Form S-1 filings are usually submissions made to the SEC while registering new securities or going public. In footnote 3, Udeya called on the need to update the Form S-1 filings to better reflect the unique nature of digital assets. The SEC Commissioner wrote:
“Many of these issuers and crypto digital assets have characteristics for which Form S-1 may technically require information that is not relevant or applicable, but does not require certain information that may be material. This [current] approach for crypto digital assets is problematic because it neither facilitates capital formation nor protects investors.”
Crypto Community Supports the SEC Commissioner
In a July 2 post on X, Alexander Grieve, head of government affairs at crypto venture capital firm Paradigm, stated that, to his knowledge, this was the first time Commissioner Udeya had publicly called for a tailored disclosure regime for crypto assets. “The SEC under a different admin would be a very different place,” Grieve added.
Similarly, the Blockchain Association, a US-based crypto advocacy group, also praised SEC Commissioner Udeya saying his “nuanced, innovation-forward approach” to crypto is exactly what the industry needs.
Udeya’s statement follows his agency’s lawsuit against Ethereum development firm ConsenSys on June 28, alleging that its wallet application MetaMask operated as an unregistered broker in the “offer and sale of securities”.
The SEC has also targeted other Ethereum staking services such as Rocket Pool and Lido DAO – the platforms that MetaMask users for Ether staking purposes.