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.
