Actions such as Wahi threaten profound economic harm to virtually everyone involved. Creators of digital assets targeted by the SEC face damage to goodwill and reputation, and the exchanges that sell the assets could be regarded as unlicensed securities brokers and face severe regulatory consequences of their own—as well as class action lawsuits brought by private parties.
Even more troublingly, purchasers of the assets in question face an unexpected and rapid loss in value of their holdings. As SEC Commissioner Hester Peirce recently stated, the agency’s “imprecise application of the law has created arbitrary and destructive results,” with “secondary purchasers of the token often … left holding a bag of tokens that they cannot trade or use.” But the SEC’s core mandate is to protect the investing public, not cause it harm.
Source: The SEC’s Approach to Digital Asset Regulation Harms Investors
