Paradigm stated that the US securities regulatory body is trying to regulate the crypto sector on behalf of those rules which were made before the internet era.
On 21 April 2023, Paradigm, a Web3 venture capital firm, published a policy piece about its problems with the United States Securities and Exchange Commission (SEC).
The VC firm noted that the SEC agency is trying to forcibly regulate the Crypto sector under the leadership of Gary Gensler and also trying to bring all those crypto assets under their regulatory authority which are not even security by nature.
According to Paradigm, crypto Investors are failing to get information on crypto assets & investment products from the US SEC.
Furthermore, Paradigm noted that SEC’s claims, to offer crypto entrepreneurs a viable path to compliance, is also not more than a fake promise.
The firm, which invests hundreds of millions into crypto and Web3 startups, noted that current securities laws were developed before 1930 and at that time internet was not available to the public, so all the existing securities laws are applicable to centralized & traditional assets, while the crypto sector is totally different.
Further Paradigm explained that in the case of security assets, a holder can target a particular centralized company but in the case of crypto no one holder can target anybody & also the whole system works on a public support system, not through an input entity or issuer.
According to Paradigm, the SEC agency needed to bring new changes in the existing current disclosure regime to bring the crypto sector under the regulatory framework with clear approach.
“Unsurprisingly, without major changes to the SEC’s current disclosure regime, the SEC is unable to effectively regulate crypto asset markets,” Paradigm stated.