There are many sharp contrasts between the worlds of business and government. Commerce often involves inconsistencies among ups and downs in the marketplace, with alternating spurts of activity, slowdowns and rapid shifts in direction as part of efforts to grow profits. The work of government has its own challenges and unique path, but as a general rule, there is a preference for consistency and order in its approach to governance. Yet it seems that some government agencies have adopted a different approach.
The SEC in particular stands out for its recent inconsistencies. Case in point: the crypto firm Ripple was recently sued by the SEC. This enforcement action is not unusual. However, it was just revealed that Ripple CEO Brad Garlinghouse attempted to settle with the SEC before its suit was issued, but the agency declined.
And yet, one year prior, the SEC willingly settled a similar claim of an unregistered security with Block. One on the Initial Coin Offering (ICO) of its EOS digital coin. Block.One paid $24 million in penalties as part of the settlement where they neither confirmed nor denied admission of guilt. Based on the $4.1 billion they raised during their ICO, the fine represented a mere 0.58% of that amount. Since the Block.One settlement only applied to the sale of its originally released digital coins, the ongoing trades of EOS were not subject to SEC restrictions.
Yet, the SEC seems to have taken an inconsistent, hardline stance with Ripple despite their extensive compliance efforts with its XRP cryptocurrency. The SEC claims that Ripple has committed an on-going violation of the law as it has sold $1.3 billion of XRP since 2013 – a fraction of the Block.One sale.
The SEC’s actions toward Ripple also come after it successfully took down Telegram and Kik, two very popular messaging platforms that attempted to launch their own digital tokens. It seems odd why the government agency seems to give one crypto project a pass, while vigorously pursuing others.
This unpredictability on the part of a government agency is very unsettling. This is also why META 1 Coin Trust does not accept contract attempts from agencies that operate outside our jurisdiction. Cryptocurrency projects that operate globally in a jurisdictionless space like META 1 Coin conduct private transactions on private exchanges. Complying with agencies that operate haphazardly in an attempt to gain their favor, as Ripple did, unfortunately leads to challenging outcomes.
The current environment is reminiscent of the Prohibition era, where government agencies engaged in futile, inconsistent efforts to shut down every alcohol-based establishment despite widespread, growing opposition to an unjust law. Ultimately, the government realized its mistake and repealed its restrictions in the face of noble opposition of freedom-loving people. Likewise, the day will undoubtedly come very soon when governments realize that crypto is too big to control and they will be compelled to cease and desist from obstructing the abundance and freedom of Humanity that digital coins like META 1 Coin seek to advance.