A U.S. senator has asked the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, to provide clear guidance on cryptocurrency regulation. The senator specified that in numerous enforcement actions, “the SEC did not identify the securities involved or the rationale for their status as securities, which would have provided much-needed public regulatory clarity.”
US Senator Wants SEC to Provide Clear Guidance on Crypto Regulation
Senator Pat Toomey, Ranking Member of the U.S. Senate Committee on Banking, Housing and Urban Affairs, wrote a letter to SEC Chairman Gary Gensler Friday regarding cryptocurrency regulation.
His letter followed Gensler’s statement prior to the Senate Banking Committee recently. Toomey started:
I compose to follow up on the issues I revealed at the hearing about the requirement for regulatory clarity around emerging innovations like cryptocurrencies, consisting of stablecoins.
Noting that “For investors to benefit from a fair and competitive marketplace, regulators must proactively provide rules of the road to industry,” the senator said the SEC “has instead adopted a strategy of regulation-by-enforcement in this area.” So far, the Commission has actually brought more than 75 enforcement actions on the crypto market and has actually enforced fines and charges amounting to more than $2.5 billion on crypto companies and people.
At the Senate hearing, Gensler touted “the SEC’s success in pursuing crypto-related enforcement actions.” However, Toomey mentioned that “In many of these enforcement actions, the SEC did not identify the securities involved or the rationale for their status as securities, which would have provided much-needed public regulatory clarity.”
SEC Commissioner Hester Peirce is also concerned about the SEC’s approach to crypto regulation. She slammed her own firm in August for taking an enforcement-centric method to crypto regulation.
The senator from Pennsylvania noted that the SEC’s approach appears related to Gensler’s belief that “the probability is quite remote” that any given cryptocurrency platform has zero securities. For example, Gensler informed Senator Elizabeth Warren at the hearing that the Nasdaq-noted crypto exchange Coinbase (Nasdaq: COIN) might have lots of tokens that might be securities.
Recently, Coinbase had to drop its plan to launch a lending product after the SEC threatened a lawsuit and the company claimed it received no explanation from the regulator. Meanwhile, the securities guard dog remains in a continuous suit with Ripple Labs and its executives over whether XRP is a security.
Senator Toomey emphasized:
The SEC has a responsibility to do more than just provide probabilistic estimates.
The senator concluded his letter by supplying a list of concerns he desires Gensler to response in an effort to acquire extra assistance on crypto regulation.
