Skip to content

SEC's Indirect Regulation of Crypto Explained by Matt Levine

Matt Levine, a Bloomberg Opinion Columnist, recently published an article analyzing the Securities and Exchange Commission's (SEC) crypto regulatory policies. In the article, Levine focuses on the SEC's authority to regulate the crypto sector, both directly and indirectly.

Matt Levine, Columnist
Matt Levine, Columnist

SEC's Power to Regulate Crypto Indirectly

Levine highlights the SEC's power to regulate cryptocurrencies through regulatory investment advisors indirectly. He explains that if a crypto exchange holding BTC pays interest on the coin, the account is considered a security subject to SEC jurisdiction.

Classification of Tokens and Interest-Bearing Accounts as Securities

Levine also discusses the SEC's categorization of tokens and interest-bearing crypto accounts as securities. He notes that the SEC argues that tokens issued to fund a crypto project's development are almost always securities, with only a few exceptions like Bitcoin and Ether.

SEC's Creativity in Regulating Crypto

Levine comments on the SEC's creativity in regulating the crypto sector despite not directly regulating cryptocurrencies. He claims the Commission has launched a comprehensive offensive to take over crypto regulation through its authority over investment advisors.

In conclusion, Levine's article provides insight into the SEC's indirect regulation of the crypto sector and its power to classify tokens and interest-bearing accounts as securities.