The US markets have seen a surge of digital coins. Millions of Americans now hold tokens in their wallets. Blocking all of it suddenly would be nearly impossible. At the same time, leaving this sector with no rules puts everyday investors in harm’s way.
Pulling the plug now would ripple through trading platforms, payment apps, and even major Wall Street firms. Levine argues that such a move would simply drive innovation and jobs offshore.
In practice, that stance rendered crypto “illegal” in the US. Many developers and investors felt shut out.
According to analysts, crypto serves two purposes: it powers networks and it offers investment chances. That split role creates regulatory headaches.
Many tokens act much like shares in a company, yet they also run on open software and community rules. The SEC knows how to protect stock investors, but digital coins need different safeguards.
Projects that truly function as securities could follow a new, streamlined process. At the same time, tokens used mainly for network services would face lighter requirements.
Levine warns that drawing clear lines won’t be easy. How do you tell a governance token from a pure utility token? What level of disclosure makes sense when code can update itself overnight?
Those questions will test regulators and industry alike. However, having defined categories would guide honest developers and protect small investors.
The SEC now faces a clear choice: use its power, but adapt its toolkit. A full ban would leave retail holders stranded. Total hands-off would leave them exposed to fraud.
Featured image from Meta, chart from TradingView
