The U.S. Securities and Exchange Commission (SEC) has been known for its alleged enforcement actions against digital asset industry-related firms and leaders, often leading to heavy legal fees for the defendants. A recent draft of a crypto bill, however, might put a stop to such regulatory overreach, as proposed by Republican lawmakers Patrick McHenry (R-N.C.) and Glenn Thompson (R-Penn.).
The draft has been met with a wave of relief in the crypto industry, as it aims to establish a clear framework for digital assets while holding both the SEC and the Commodity Futures Trading Commission (CFTC) accountable for their actions. Attorney James Murphy suggested an amendment to the crypto bill, recommending that the SEC cover the legal fees of the defendants if the commission fails to prove its case.
Ripple CEO Brad Garlinghouse, who is currently a defendant in an SEC lawsuit, revealed that the blockchain firm may end up spending approximately $200 million in legal fees by the end of the case. In another instance, the SEC’s approach to delay legal proceedings in the case against Lbry could potentially lead the defendants to bankruptcy. The proposed amendment to the crypto bill would require the SEC to reimburse defendants’ legal fees if they lose, which could potentially result in a $200 million payout to Ripple if the company wins its case.
While the draft is still under consideration, its completion could bring about significant changes to the way digital assets are regulated and the responsibility of regulatory bodies such as the SEC. However, some may argue that such a change could lead to legal complications and potentially weaken the SEC’s ability to enforce regulations effectively.
On the other hand, supporters of the amendment stress the importance of holding regulatory bodies accountable for their actions. This could encourage fair and reasonable enforcement practices in the future, which many in the crypto community view as crucial, especially given the rapidly evolving nature of digital asset markets.
Ultimately, the outcome of this proposed crypto bill, along with its potential amendments, could have a significant impact on the digital asset industry as a whole. It raises essential questions regarding the roles that regulatory bodies like the SEC and CFTC should play in ensuring the safety of consumers and investors while allowing innovation and growth to thrive within the cryptocurrency markets.
Source: Coingape
