Circle issued a document questioning the dynamics of US crypto assets regulation

On May 23, Circle issued a message that the recent signal from regulators is creating an uncertain environment for crypto assets, prompting them to take action that is frustrating for themselves, their customers, and their communities. Circle said that one of the main guidelines of the US SEC was that the cryptographic assets used in the appropriate decentralized network may no longer represent securities, as mentioned in the speech of the SEC corporate finance director William Hinman in June last year. The community responded positively because decentralization is the core of encryption. But the situation has changed dramatically recently because the SEC issued a framework plan for digital assets as a marketable security in April. Although the SEC believes that the framework only clarifies existing laws, Circle believes that the framework represents a major change in the US encryption community in many ways: 1. The framework undermines Hinman’s earlier view that full decentralization can indicate digital assets. Not a security; 2. The framework introduces the notion that a secondary market in a digital asset may indicate that it is a security; 3. The framework assumes that the first two factors of the Supreme Court's Howie test are always applied to digital assets. These two factors have helped to prove that digital assets are not securities; 4. The framework provides a broader approach to SEC enforcement actions. At the end of the article, Circle mentioned the “Token Classification Act” and said that he would continue to educate lawmakers about the legislation and urged them to support the legislation.