Coin Center to SEC: Quit the Regulatory Band-Aids and Draft Some Real Rules Already!

Crypto advocacy powerhouse Coin Center has sent a strongly-worded letter to the SEC, essentially telling the agency to stop playing regulatory whack-a-mole and finally write a rulebook that doesn't look like Swiss cheese. Dated March 5 and released publicly this week, the letter dryly notes that while "individualized relief can provide short-term clarity, it risks fragmentation, implicit merit regulation, and uneven treatment across projects"—or, in degen speak, it creates a VIP lane for those who can afford the lawyers.

The group makes the case that crypto networks are public infrastructure, not private country clubs, arguing the regulator should "prioritize rulemaking wherever possible" instead of offering bespoke legal interpretations like they're custom-tailoring suits.

Not to be outdone, the SEC promptly dropped its own notice trying to explain how "non-security crypto assets" fit under ancient securities laws, complete with a shiny new "coherent token taxonomy" that attempts to sort everything from digital commodities to JPEGs. Then, on March 12, the SEC and CFTC signed a memo of understanding, a bureaucratic peace treaty aimed at ending their decades-long turf war over who gets to yell at which part of crypto.

Meanwhile, the drip-feed of no-action letters continues, the regulatory equivalent of handing out "get out of jail free" cards one at a time. The latest went to wallet provider Phantom Technologies from the CFTC, giving a cautious nod to certain activities. The SEC itself has dished out two such letters to DePIN projects and, back in September, gave investment advisers permission to use state-trust companies as crypto custodians—because nothing says "clarity" like a slow trickle of case-specific exemptions.

Coin Center warns this scattershot method is a recipe for uncertainty, essentially creating a pay-to-play system that favors projects with the deep pockets to navigate the legal labyrinth, tilting the playing field more than a Solana network outage.

On the Capitol Hill front, the CLARITY Act is making its way through Congress, promising to be the legislative equivalent of a referee finally showing up to the game. If it passes, it would hand the SEC and CFTC a clearer map of who regulates what, theoretically cutting through the jurisdictional fog and standardizing how the industry gets treated—or, more likely, scolded.