Digital Ascension Group General Counsel Rick Tapia has highlighted a new requirement for U.S. Securities and Exchange Commission (SEC) attorneys to seek approval before formally launching probes. Tapia noted that this measure could help create a more predictable regulatory environment and potentially reduce arbitrary enforcement actions in the cryptocurrency industry. He shared his statement in a post on February 3.
"The SEC's new policy requiring commissioner approval before launching investigations is a major shift that reins in unchecked enforcement power," said Tapia. "For years, crypto has faced regulatory overreach through aggressive, unpredictable actions. Now, with politically appointed commissioners having a say, there's a higher bar for investigations, bringing much-needed oversight. This move could mean fewer arbitrary crackdowns and a more predictable regulatory environment."
According to Yahoo Finance, SEC attorneys have been informed that they must now obtain permission from the commission's politically appointed leadership before initiating formal investigations. Although the SEC has not officially announced this change, proponents argue it may reduce harm to individuals and entities under investigation. While enforcement staff can still conduct informal investigations, such as sending requests for information, formal orders are necessary to issue subpoenas.
A report from Social Capital Markets indicates that SEC fines against the crypto industry surged from $150.26 million in 2023 to $4.68 billion in 2024, marking a significant increase of 3018%, as previously reported by Federal Newswire. Despite this rise in penalties, industry participants continue to highlight a lack of regulatory clarity within the crypto ecosystem. "I think our policies and our approach over the last several years have been just really a disaster for the whole industry," said SEC Commissioner Mark Uyeda. Uyeda emphasized the need for clear guidance and interpretations regarding securities laws.
The SEC has faced criticism for its enforcement actions within the crypto sector, according to Federal Newswire. J.W. Verret, a law professor at George Mason University and former member of the Investor Advisory Committee of the SEC, described the SEC's lawsuit against Binance as an "overreach." The lawsuit alleges that certain tokens offered by Binance are investment contracts; however, Verret argues that the SEC is "reaching extraterritorially - reaching out into other countries, disrespecting the sovereignty of those countries with actions that go after founders who were founding crypto projects outside of the United States."
Tapia became general counsel at Digital Ascension Group in August 2024, according to LinkedIn. He also serves as CEO and co-founder of DraftChain.AI and previously co-founded Blockchain Law Alliance while working as an attorney for Bull Blockchain Law, LLP.
