US Securities and Exchange Commission (SEC) Commissioner Caroline Crenshaw Criticized the Agency's Latest Stance on Stablecoins

YEREVAN (CoinChapter.com) — Caroline Crenshaw, Commissioner at the U.S. Securities and Exchange Commission (SEC), criticized the agency's latest stance on stablecoins.

Caroline Crenshaw, Commissioner at the U.S. Securities and Exchange Commission (SEC), has launched a critical assessment of the agency’s latest stance on stablecoins. In her statement, Crenshaw said the SEC’s new approach to some USD stablecoins contains legal and factual mistakes.

According to legal documents released on April 4, Crenshaw took aim at the SEC’s claims that certain stablecoins may not be securities and could also be exempt from transaction reporting.

Crenshaw’s comments highlight a difference in opinion on how to view the risks in the stablecoin market.

Stablecoin Risks Remain Despite Full Back

The SEC said that if a USD stablecoin issuer holds reserves equal to the token supply, it could handle unlimited redemptions. However, Crenshaw argued that this view does not take into account the full picture of stablecoin risks.

“The issuer’s overall financial health and solvency cannot be judged by the value of its reserve,” stated Crenshaw. She added that the reserve levels do not show the issuer’s liabilities or other financial risks.

Crenshaw’s remarks come amid ongoing discussion about the legal status of cryptocurrencies in the U.S. and the role of the SEC in regulating the industry.

Earlier this year, the SEC sued major cryptocurrency exchange Coinbase (NASDAQ:) and Binance for allegedly operating as unregistered exchanges and selling unregistered securities.

Stablecoin Market Structure

Crenshaw also pushed back on the SEC’s claim that issuer actions — like keeping the token stable or ensuring redemptions — reduce risk.

She stated that the agency’s view overlooks how these mechanisms actually work in practice.

Crenshaw said the majority of USD stablecoins are sold through intermediaries, not directly to retail users as the SEC mentioned.

According to her analysis, over 90% of USD stablecoins in circulation are distributed in this way.

“This point marks a crucial divergence between Crenshaw’s assessment and the SEC stablecoin guidance,” noted Chainwire.

Her analysis indicates that the market structure differs significantly from the impression conveyed by the SEC’s phrasing.

Industry Reactions Mixed

Parts of the crypto industry responded to the SEC’s update. While Caroline Crenshaw expressed concerns, some industry leaders welcomed the clarification.

Ian Ballina, founder of Token Metrics, said the guidance shifts focus to important matters. Tan Tran, CEO of Vemanti Group, said he had hoped to see this change earlier. Ian Kane of Midnight Network said it helps those following the rules.

Despite positive reactions from some sectors, Crenshaw warned that the guidance does not reflect real stablecoin risks. She said the new approach may give a false sense of security to the public.

Crenshaw’s comments come as Tether begins working with a Big Four accounting firm to audit its reserves and confirm its USDT stablecoin is fully backed.

On March 22, Tether CEO Paolo Ardoino said this process could move faster if Donald Trump returned as U.S. President. Trump is seen as more supportive of crypto.

The Tether audit raises new questions about how USD stablecoins are backed and how transparent issuers really are. Crenshaw’s comments connect to these broader concerns about stablecoin risks and the structure of the stablecoin market.