Crypto Regulation By Enforcement = Regulation That Stifles Legitimate Innovation

The SEC's policy of drawing the line between securities and non-securities principally through enforcement actions forces innovators desiring to take advantage of decentralized blockchain technology for legitimate commercial purposes to navigate between the untenable Scylla and Charybdis of not innovating or innovating and risking the SEC's litigation wrath.

To date, cryptoassets are the principal fuel that incentivizes decentralized communities to participate in consensus protocols necessary for decentralized blockchains to function. However, it is not clear what level of decentralization satisfies the SEC that a cryptoasset associated with a blockchain is not a security. Moreover, many cryptoassets may start their life cycle as a security but become a non-security over time, like ether.