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SEC Commissioner Crenshaw Slams New Stablecoin Guidelines as Misleading

by Darius Ngetich
Apr 5, 2025 - 2:20 pm
in Blockchain
Courtroom exterior symbolizing federal legal proceedings in the Samourai Wallet case

Crenshaw Criticizes SEC’s New Stablecoin Guidance

SEC Commissioner Caroline Crenshaw has loudly denounced the agency’s newly issued guidance for USD stablecoins, warning that it severely mischaracterizes the market and dangerously underestimates potential risks.

A Crypto Skeptic

Crenshaw, a vocal critic of spot Bitcoin ETFs, released a statement on April 4 in which she said the SEC’s characterization of the stablecoin market is replete with “legal and factual errors.”

She contended that the agency’s claim — that stablecoins are generally directly accessible through issuers — is inaccurate. “Over 90% of outstanding USD-stablecoins are distributed. through intermediaries,” she said.

Industry Responds with Enthusiasm

While Crenshaw rang alarm, the remainder of the crypto industry was more open to the guidelines, which exclude some stablecoins from being regulated as securities.

Token Metrics founder Ian Balina called it a “clear step” towards making decisions based on real issues in crypto. Midnight Network’s Ian Kane said it “feels like progress for crypto people trying to play by the rules.”

Problems Surrounding Financial Health

Crenshaw also called into question the SEC’s guarantees around stablecoin redemption. She argued that reserve matching is insufficient in determining the issuer’s financial health.

“The overall financial condition and solvency of the issuer cannot be ascertained from the value of its reserve,” she said.

Tether and Transparency

Crenshaw’s comments come as Tether will engage a Big Four accounting firm to audit its reserves, endeavoring to prove its USDT token is 1:1 fully backed.

Earlier this month, Tether CEO Paolo Ardoino suggested that with a pro-crypto administration like Trump’s, audits could be more streamlined.

A Deepening Divide

The schism between regulators and the cryptocurrency community is widening further. While as much as the SEC may be leaning towards regulatory clarity, internal resistance shows that full agreement is far from the horizon.

Tags: BlockchainRegulation
Darius Ngetich

Darius Ngetich

Darius Ngetich is a blockchain, crypto, and gaming enthusiast. He is also an animator, VFX Artist, and Game Developer, specializing in computers with vast experience in programs like Blender, Unity, and Unreal Engine. My passions are creating games and informing others about the latest developments in crypto, blockchain, and gaming.

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