Commissioner Caroline Crenshaw criticizes SEC for inconsistency in cryptocurrency approach, warning about the risk of an increasingly "murky legal landscape".
The debate about digital asset classification has escalated into a legal crisis at the United States Securities and Exchange Commission (SEC), where conflicting statements from the agency are creating chaos in determining the legal nature of key cryptocurrencies.
Commissioner Caroline A. Crenshaw made sharp remarks on May 31, accusing SEC of sending seriously contradictory messages about the legal status of digital assets. She particularly criticized the inconsistency in how SEC handles Ethereum (ETH) and Solana (SOL), two of the largest market capitalization cryptocurrencies in the world.
From February to April 2025, the SEC's Corporate Finance Division issued a series of statements affirming that many digital assets, including meme coins and stablecoins, are not considered securities. These statements were made while the SEC's Crypto Task Force was working to create regulatory transparency.
Policy Contradictions in ETF
What most frustrated Crenshaw was SEC simultaneously approving Exchange Traded Fund (ETF) registration files under the 1940 Investment Company Act, which assumes ETH and SOL are securities. She sharply questioned how the same asset could be considered non-securities in one instance but securities in another.
"How can these crypto assets not be securities when it comes to registration requirements, but are considered securities when someone wants to leverage opportunities to sell new financial products?" Crenshaw raised in her statement.
The commissioner warned that instead of creating a consistent legal framework, SEC is encouraging an "extremely aggressive approach to market penetration", which is completely contrary to the legal standards the agency itself established.
Meanwhile, crypto supporters like Commissioner Hester M. Peirce continue to defend the view that most crypto assets in the market should not be classified as securities. This internal division at SEC is creating an unstable legal environment, making it difficult for investors and technology companies to make informed business decisions.
Crenshaw concluded with a warning that SEC's quest for clarity is only pushing the industry further away, "adrift in an increasingly murky legal waters" created by the regulatory agency itself.
