On May 8, Ryan Sean Adams, a prominent crypto investor and entrepreneur, challenged the U.S. Securities and Exchange Commission’s (SEC) views on the adequacy of crypto disclosures. On social media platform X, Adams directly addressed comments by SEC Chair Gary Gensler regarding the perceived lack of transparency in cryptocurrency operations.
Adams’s statement, “Gary says crypto doesn’t have disclosures. He is wrong,” sets a confrontational tone against Gensler’s critique that the cryptocurrency sector lacks sufficient disclosure mechanisms comparable to those required in traditional financial markets. Contrary to Gensler’s assertions, Adams argues that the Ethereum blockchain, for example, functions as a decentralized ledger that issues an “earnings report” every 12 seconds. This data is globally accessible to anyone with an internet connection, providing real-time insights into the state of the network.
Highlighting the open-source nature of blockchain technology, Adams points out that crypto does not just meet traditional standards of disclosures but actually exceeds them. Blockchain’s inherent transparency allows all network activities to be openly audited by the public, a stark contrast to the more closed systems of corporate financial disclosures typical in traditional markets. According to Adams, this level of transparency, where “crypto has better disclosures”, challenges the SEC’s narrative and showcases the advanced capabilities of blockchain technology in promoting financial transparency.
Adams also suggests that the SEC could enhance its own disclosure mechanisms by integrating its EDGAR database with the Ethereum blockchain. This integration could theoretically allow the SEC to harness blockchain’s transparency, providing a more dynamic and accessible platform for financial disclosures.
However, Adams argues that the ongoing regulatory discussions around disclosure requirements might not be about transparency at all. Instead, he suggests that these efforts reflect deeper issues of control. “This was never about disclosures. It’s about control,” states Adams, implying that regulatory authorities may be more interested in maintaining control over financial systems than in enhancing disclosure or transparency. He emphasizes that the foundational principle behind Bitcoin and similar technologies was to create a monetary system where disclosures are inherent and auditability is accessible to all.
Expanding on the theme of inherent transparency, Adams notes that anyone can run a Bitcoin node, which will continuously disclose the total supply of Bitcoin. This level of public access to critical financial data stands in contrast to traditional systems like the U.S. dollar, where such transparency is not readily available.
