What he should have done: clarified upfront the status of Crypto tokens, like "X, Y, Z are commodities. A, B, C are securities" etc. And then offer a path to register those securities so that Coinbases of the world can start offering them properly.
What he did: sued Coinbase for trading 10-11 tokens as unregistered securities. And good players still don't know how to register Crypto tokens with SEC as securities.
I'm not sure of the legal framework around securities in the US, but I imagine, when a novel financial instrument is being traded, the regulations work along the lines of "Here's the law. We expect you to use it to decide if this instrument is a security or not, and if it is, well, comply. And if you decide it's not, please have a really good argument."
Like when you're filing a tax return, you decide if something's deductible or not, based on the tax code, and if you get it wrong, then the Government unleashes pain on you. But they're not holding your hand.
It makes sense to me that the people with the most to gain from a novel financial instrument should be the ones who determine if it's legal, and explain why it's legal.
And if you don't have legal certainty about the status of token X... ...don't trade it.
The exchanges took the risk, made some good (fiat) coin doing so, and now they're finding out they were wrong.
And tbh I'm not sure there's an path to registering the many tokens that function as effective Ponzi schemes, because they're illegal.
Don't get me wrong, I think that the SEC was asleep at the wheel for years on this, but I can't see how that justifies being outraged when the regulator eventually pulls thumb. They made a lot of money while the regulators were napping.
What he should have done: clarified upfront the status of Crypto tokens, like "X, Y, Z are commodities. A, B, C are securities" etc. And then offer a path to register those securities so that Coinbases of the world can start offering them properly.
What he did: sued Coinbase for trading 10-11 tokens as unregistered securities. And good players still don't know how to register Crypto tokens with SEC as securities.