A crypto lobby group has stated that the US Securities and Exchange Commission (SEC) should refrain from regulating most decentralized autonomous organizations (DAOs). The lobby group argues that the SEC’s current regulatory approach is overly broad and may have far – reaching negative implications for the digital asset industry.
The SEC has been increasingly focusing on regulating the crypto space, including DAOs. However, the crypto lobby group believes that many DAOs do not meet the definition of securities and should not be subject to SEC regulation. They claim that the SEC’s attempts to regulate DAOs through enforcement actions are an “unprecedented, stealth attempt to expand the SEC’s jurisdictional reach”. This approach, they say, threatens the health and viability of the US marketplace for digital assets and creates significant uncertainty for industry participants.
The lobby group also points out that the lack of clear rules and regulations in the crypto space has driven innovators offshore and reduced the US’s competitiveness in the digital asset industry. They advocate for Congress to pass legislation to clarify the regulatory environment for digital assets, rather than the SEC taking a proactive enforcement approach.
In addition, the lobby group may argue that DAOs have unique characteristics that distinguish them from traditional centralized organizations. For example, DAOs operate based on smart contracts and decentralized governance mechanisms, without a central authority or management team. These characteristics make it difficult to apply traditional securities regulations to DAOs in a straightforward manner.
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