Paradigm Criticizes SEC’s Approach to Crypto Regulation

Paradigm, a venture capital firm, has recently published an article criticizing the US Securities and Exchange Commission (SEC) for its approach to regulating cryptocurrencies.

They have argued that the SEC’s current disclosure system, created in the 1930s, was designed to regulate securities issued by centralized companies.

However, this system is not suitable for the cryptoasset markets, which are fundamentally different from securities markets.

The firm has stressed that the issuer of securities creates relationships with investors and is “inevitably a driver of value” for these assets, requiring an S-1 application and full business and risk information.

In the case of cryptocurrencies, however, the authors have suggested that this emphasis on information disclosure is not necessary because these digital assets do not have an identifiable ‘issuer’ and the technological capabilities of a cryptoasset may be beyond the control of the individual or entity that originally deployed the code.