Senator Toomey Asks SEC Questions about Forced Regulation of Cryptocurrencies
U.S. Senator Pat Toomey, a member of the Pennsylvania House of Representatives, has written a letter to the Securities and Exchange Commission (SEC). In his message, he asks commission chairman Gary Gensler to explain how the agency regulates cryptocurrency firms, arguing that the current set of standards has led to billions of dollars in losses for American investors and stifles innovation in the financial industry.
Toomey, the top Republican on the Senate Banking, Housing and Urban Affairs Committee, argued in a July 26 letter that creditors who have recently initiated bankruptcy proceedings - such as Celsius and Voyager - fall under the jurisdiction of the SEC. If the Securities and Exchange Commission had provided crypto firms with regulatory clarity, things could have been different, Toomey said in his letter.
"Companies could adjust product offerings accordingly, preventing investor losses today, and the SEC could freely focus enforcement efforts on the worst participants," the letter said.
The SEC has already prosecuted lender BlockFi three months before other crypto lenders froze their clients' accounts. Toomey argued that the SEC could share its opinion on how crypto lending products fit into securities laws, since it has already made a decision regarding BlockFi. It is reported that the securities regulator also investigated compliance with the requirements of Celsius and Voyager and did not take any action before state regulators began filing enforcement actions against creditors.
"Regardless of the merits of any particular enforcement action by the SEC or the state, the SEC's continued refusal to clarify the regulation of the crypto community, combined with a haphazard and apparently sluggish pace of enforcement, harms not only investors, but also innovation," Toomey said in the letter.
Instead, the SEC prefers to regulate forcibly in general, Toomey said, citing a recent insider trading lawsuit filed by the SEC that could have unintended consequences for a number of token projects. The application claimed that nine tokens represent securities of digital assets, in fact designating them and the exchanges on which they are listed as non-compliant, without filing enforcement measures against them or clarifying the position.
"In this and other circumstances, the SEC allegedly had a clear opinion on why it considers these digital assets to be securities, but it did not make this opinion public before the enforcement action began," Toomey said. There are many reasons to be skeptical of the SEC's view that most digital assets are securities."
To better understand the SEC's thought process, Toomey asked the regulator eight questions. They relate to internal discussions related to crypto lenders. In particular, the senator asks whether the SEC has determined that other creditors offered securities after the BlockFi action, and whether enforcement measures were planned.
Other issues relate to the dialogue between crypto firms and the SEC. Toomey asked if the creditors had ever sought advice from the SEC and how the conversation ended. Toomey also asked about a recent insider trading complaint against a former Coinbase employee and his associates, asking for clarification on what makes nine assets securities and what guidance the SEC plans to give to other tokens not mentioned in the complaint.
Toomey turned to Gensler with questions about the tactics of forced regulation last September during a hearing before the Senate Banking Committee. At that time, he also asked Gensler to clarify the regulation of cryptocurrencies.
https://coin-signal.com/cryptonews/senator-toomey-asks-sec-questions-about-forced-regulation-of-cryptocurrencies/
#Asks, #Crypto, #Cryptocurrencies, #Cryptonews, #Forced, #Law, #PATTERN, #Questions, #Regulation, #Sec, #Senator, #Toomey
#CryptoNews, #LawCrypto