Sacramento County's District Attorney Anne Marie Schubert-Ho argues that vague regulatory frameworks around cryptocurrency create legal uncertainty that stifles innovation rather than protecting consumers. She contends that government agencies should clarify rules instead of pursuing aggressive enforcement against emerging technologies.
Ho points to crypto as a prime example of how ambiguous regulations backfire. Companies and developers operate in a grey zone, unsure whether their activities comply with existing law. This uncertainty chills investment and development. Aggressive prosecution without clear guidelines compounds the problem, pushing legitimate innovation offshore rather than fostering domestic growth.
The DA's position reflects growing frustration among industry advocates and some policymakers about the current regulatory environment. The SEC, CFTC, and state regulators have pursued enforcement actions against crypto platforms and protocols, often citing violations of securities or commodities law. But these agencies have not articulated comprehensive rules defining which tokens qualify as securities or how protocols should register.
This enforcement-first approach creates a catch-22. Projects cannot comply with rules that don't exist. When regulators later prosecute, defendants argue they acted reasonably under the circumstances. The outcome leaves the market worse off.
Ho's argument aligns with recent calls from crypto advocates and some lawmakers for a clearer regulatory framework. The Responsible Financial Innovation Act and similar proposals attempt to carve out regulatory jurisdiction between agencies and establish safe harbors for token launches and DeFi protocols.
The timing matters. Bitcoin trades near $45,000. Ethereum sits around $2,500. Major institutional investors await regulatory clarity before committing capital. If the U.S. continues enforcing ambiguous rules while avoiding legislative clarity, other jurisdictions gain an advantage. El Salvador, Singapore, and the UAE have attracted crypto talent and capital partly by establishing explicit frameworks.
Ho's intervention from law enforcement circles adds credibility to the clarity argument. Prosecutors typically favor aggressive enforcement. When a DA argues for clearer rules over prosecution, it signals that the current system serves no one.
WHY IT MATTERS: Regulatory clarity directly determines whether the U.S. remains competitive in crypto innovation or cedes market share to jurisdictions with explicit rules