Congressmen Urge SEC to Stop Regulating Crypto by Enforcement
U.S. Congressman Ritchie Torres (D-NY) recently wrote a letter to the U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler, addressing the issue of how the SEC should regulate crypto following the SEC v. Ripple case ruling. The letter brought both bad news and good news for crypto enthusiasts. Here’s a breakdown of the key points:
- Judge Analisa Torres of the Southern District of New York rejected the SEC’s regulatory overreach and ruled that crypto assets, except bitcoin, are not securities in themselves.
- Crypto assets can be sold as part of investment contracts, which qualify as securities under the Howey Test.
- The SEC was faulted for failing to provide fair notice to the crypto industry.
- The SEC has not issued any rules on crypto assets and has instead relied on enforcement actions, causing confusion and contradiction.
- Congressman Torres hopes the SEC will reassess its regulatory approach and focus on bad actors.
Congressman Warren Davidson (R-OH) also supports a different approach and urges Congress to provide clarity for investors, innovators, regulators, and the courts.
Hot Take
The ruling in the SEC v. Ripple case is a significant blow to the SEC’s regulatory crusade against crypto assets. It highlights the need for clear rules and guidance from the SEC rather than relying on enforcement actions. Hopefully, this decision will lead to a reassessment of the SEC’s approach and a focus on addressing actual transgressions in the crypto industry.
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