CEO Messari accused SEC of corruption and prepared for ‘war’

As an analyst with a background in finance and experience following the regulatory landscape of the crypto industry, I find Ryan Selkis’ accusations against the SEC concerning and not without merit. The crypto industry has long criticized the SEC for its unclear and inconsistent approach to regulating cryptocurrencies, often leading to frustration among companies and investors alike.

Messari’s chief executive expresses strong criticism towards the SEC, alleging instances of corruption and inadequate oversight in the regulation of the cryptocurrency sector.

Ryan Selkis, the CEO and co-founder of Messari, announced his decision to no longer collaborate with the U.S. Securities and Exchange Commission (SEC) in any capacity – be it formal or informal. He expressed confidence that the SEC is undergoing significant changes, including new leadership.

As a dedicated crypto investor, I’ve decided to break free from the Securities and Exchange Commission (SEC) and its questionable leader, Gary Gensler. In the coming months, Messari will be gearing up for a battle against this seemingly illegitimate and corrupt regulatory body. The following draft will undergo refinement and enhancement before being submitted to both the SEC and Congress. 🇺🇸🇺🇸🇺🇸
— Ryan Selkis (d/acc) 🇺🇸 (@twobitidiot) July 7, 2024

Selkis argued that the SEC’s pursuit of crypto companies is a dereliction of duty to safeguard citizens and maintain market order. Instead of establishing definitive guidelines for cryptocurrency regulation, the SEC seems more focused on advancing its own agenda and that of federal employees, rather than the digital asset sector. Furthermore, he labeled SEC Chairman Gary Gensler as inept and unscrupulous.

As a researcher, I’ve come across concerning findings. It appears that this entity prioritizes its own interests and those of its federal employees above all else, rather than focusing on safeguarding citizens from fraud and deceit, overseeing market health, and fostering capital-raising organizations.
Ryan Selkis, Messari CEO and co-founder

I believe our analytics platform stands a strong chance of rivaling the Securities and Exchange Commission (SEC) by leveraging contemporary technology to deliver top-notch market data.

Messari data registry

In 2018, Messari introduced a database detailing information about crypto projects, modeled after the Securities and Exchange Commission’s EDGAR database. According to Selkis, open blockchains have the potential to fundamentally transform the way financial assets are issued and settled. Private entities leveraging new technologies can more effectively address public requirements, rendering traditional regulatory bodies increasingly irrelevant.

The founder of Messari expressed that probing into crypto-related scams through investigative journalism proves to be more productive than the SEC’s strategy of shutting down questionable firms. Selkis emphasized that Messari played a significant role in exposing discrepancies within major cryptocurrency companies.

SEC fraud

I’ve observed Selkis voicing his concerns about the Commission before. Back in August 2022, he estimated that users suffered a loss of approximately $1 billion from cryptocurrency fraud during the previous year. Nevertheless, this amount pales in comparison to the number of investors negatively impacted by the SEC’s perceived unwelcoming stance towards cryptocurrencies.

Selkis acknowledged that the Securities and Exchange Commission (SEC) preference for crypto Exchange-Traded Funds (ETFs) led to approximately $7 billion in losses for Grayscale investors. According to Messari’s founder, Gensler appeared more focused on expanding the SEC’s control over the cryptocurrency industry than on ensuring investor protection.

The crypto industry continues to criticize the SEC

As a researcher studying the regulatory landscape of cryptocurrencies, I’ve observed that the Securities and Exchange Commission (SEC) has implemented policies that have drawn criticism from industry participants and American legislators on occasion. Towards the end of June, for instance, Brad Garlinghouse, CEO of Ripple, publicly criticized both the SEC and its chairman, Gary Gensler.

As a crypto investor, I believe that Gary Gensler’s approach at the SEC could potentially play a significant role in the outcome of the upcoming presidential election between Joe Biden and his opponent. According to my observation, the current regulatory stance towards the cryptocurrency sector under Gensler’s leadership might hinder the industry’s growth and development in the US, which some may view as a critical issue for voters. Furthermore, Brad Garlinghouse, Ripple’s CEO, has publicly criticized this situation, stating that such actions could undermine public trust in both the blockchain industry and government institutions.

It’s utterly absurd what @GaryGensler expressed today. And the unfounded accusation against “all crypto executives ending up in jail” from him, who failed to act on FTX (and even showed favoritism towards SBF), and wasn’t even included in the DOJ announcement regarding Binance.
— Brad Garlinghouse (@bgarlinghouse) June 25, 2024

Garlinghouse pointed out the SEC’s inability to prevent the FTX cryptocurrency exchange from crashing, resulting in substantial losses for investors. Simultaneously, he criticized the Commission for taking a harsh stance against legitimate crypto businesses by initiating lawsuits against them. This inconsistency in regulatory actions, according to him, could lead to severe political repercussions.

As a crypto investor, I’ve noticed that Coinbase, the popular cryptocurrency exchange platform, has taken legal action against both the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) in the U.S. District Court. The specifics of the lawsuit aren’t clear to me yet, but it seems that Coinbase is challenging certain regulatory requirements imposed on them by these entities.

The crypto exchange maintains that US regulators are taking aggressive measures to disrupt the industry. For approximately two years, various federal financial regulatory bodies such as the SEC, FDIC, and the Federal Reserve have employed numerous regulatory tactics to achieve this end.

American politicians are unhappy with Gensler

In the past year, the leader of the Securities and Exchange Commission (SEC) in the United States received intense scrutiny over the agency’s position on cryptocurrencies. The main points of contention included determining Ethereum‘s classification as a security, regulating stablecoins, and addressing the situation surrounding FTX.

As a passionate crypto investor, I couldn’t help but express my frustration directly towards the commission head during the recent hearing. I strongly believed that his actions were intentionally driving the crypto industry away from the United States and into the hands of the Chinese Communist Party.

Democrats voiced their disappointment towards Gensler over insufficient enforcement actions against offshore companies such as Binance and Tether, which cater to American customers.

Following the meeting’s outcome, Ohio’s U.S. House Representative and Republican, Warren Davidson, announced his intention to present legislation compelling Gary Gensler to step down as the Securities and Exchange Commission (SEC) chairman.

As an analyst, I propose the following correction to address a long-standing series of abuses: I am introducing legislation that strips the Chairman position at the Securities and Exchange Commission (SEC) of its powers and replaces it with an Executive Director. This new role will report directly to the SEC Board, where the ultimate authority lies. Previous chairs of the SEC are barred from holding this position.
— Warren Davidson 🇺🇸 (@WarrenDavidson) April 16, 2023

Gensler aimed to revise the exchange definition, leading to considerable backlash from crypto sector figures due to this proposed change.

How will Messari’s statements affect the SEC?

As a crypto investor, I’ve grown accustomed to the constant criticism of the SEC from politicians and industry figures in the cryptosphere. However, their actions speak louder than words, and the SEC has continued to file lawsuits against various cryptocurrency companies. Consequently, regardless of Selkis’ statements, the SEC will likely persist with its current regulatory approach.

2024-07-08 17:55