Crypto or Contraband? America’s Regulatory War Over Securities and Commodities -By Fransiscus Nanga Roka

The United States has left a royal mess over crypto regulation, especially for a country that lectures the world on the rule of law. WashingtonStill Doesn’t KnowWhat Crypto Is AfterYears Of Digital Asset Growth, Fails To Even Answer TheMost BasicLegal Question We don’t even know whether crypto is a security or commodityWhere so you can imagine regulators trying to sue what they want itto be.

That’s not a legal structure, and so in fact. It is regulatory opportunism.

It is often framed as a technical jurisdictional tussle between the U.S. It is not. It is a collision of titanic proportions for the markets, for innovation and American law’s self-respect. The question is no longer what regulations to apply on crypto. Whether it’s the government of the US that can be trusted to regulate a nascent industry without then turning confusion itself into an instrument.

The deep absurdity A simple a. American regulators have long spent years implementing their enforcement actions policing digital assets, meanwhile Congress has struggled to create a clear statutory line between securities and commodities in the context of crypto. This means that the same asset can be legal in one context, suspicious or even prosecutable when politically expedient. Entrepreneurs are held accountable to rules that at best still remain differentiable, liquid and semi-sovereign universes in some varying degree of academic incoherence.

A serious legal system should not work like this.

Verbose: Just say it, if the asset is a security. If commodity, define it specifically But the present method survives on doubt, as a result of uncertainty is energy. It enables agencies to pursue jurisdiction piecewise, settlement by settlement, headline by headline. It provides regulators with the most discretion and market actors with the least amount of clarity. This means, in practice, that the government does not have to prevail on its resolution first. It just has to sustain confusion long enough to win the field.

This is why attempts to pass legislation like the CLARITY Act matter even if you are skeptical of crypto. The real scandal is not that digital assets are under Washington watch. The scandal is that it has been doing so for far too long without clarifying the legal categories on which any kind of regulation can be based. A grown-up nation does not punish then define. Of course, this is the essence of arbitrary power and not democratic rule.

This goes beyond crypto traders and Silicon Valley founders. Markets depend on predictable rules. Investors depend on stable classifications. Innovation depends upon knowing which regulator regulates what activity and under what legal test. Remember that the collapse of these fundamental coordinates does not make a market safer. It becomes more political. Success will be less determined by regulatory compliance than by riding the waves of a sudden shift in sentiment.

And that is where America’s approach shifts into the realm of profound self-sabotage. While the United States professes an interest in financial innovation leadership, it extends to innovators a legal quagmire. It professes to protect competition, yet it allows a system in which one agency can wrest jurisdiction and private parties bear the cost. Ist asserts that it is dedicated to the rule of law, but in crypto one often sees a form where by reverse-engineering the strategy for enforcement on specific cases hence creating artificial notions of laws.

That should scare all but those who hate on digital assets. Today the target is crypto. Tomorrow it just as likely to be any emergent sector that does not conform with previous categories comfortably. Once the state gets comfortable with “regulate first, clarify later,” legal certainty becomes a luxury rather than an entitlement. The damage is not limited to economics. It is constitutional in spirit. Citizens and businesses have the right to know what the rules are before they face penalties.

We require more time for testing, the worst of crypto may be overhyped and rife with bad actors. However, legal ambiguity does not equal consumer protection. It is not sound governance to have bureaucratic turf war. Calling something suspicious because the government has yet to designate it as such is quite an inversion of justice.

America does not need a more pretentious crackdown. It needs a clearer law. Until that day, the nation’s crypto policy will continue to be what it’s too often been: not a rational regulatory regime but an institutional ego competition masquerading as consumer protection.

Fransiscus Nanga Roka

Faculty of Law University 17 August 1945 Surabaya Indonesia