Pat Toomey Blames SEC For Crypto Lending Platform Crisis
A senator friendly to the crypto industry criticized The U.S. Securities and Exchange Commission (SEC) for forced regulation and lack of clarity. Pat Toomey said he believes the Commission's approach to regulation through enforcement is ineffective.
According to the senatorPat Toomey, known for his high-profile support of the crypto industry, the U.S. Securities and Exchange Commission (SEC) could have prevented the loss of $12 billion in assets by investors who trusted the Celsius crypto lending platform, which froze their deposits in June.
In Toomey's official letter to the SEC ChairmanGary Gensler On July 26, it was said that the Commission's failure to clarify how it would apply existing securities laws to digital assets and services had led to undesirable consequences.
"Companies could adjust product offerings accordingly, preventing investor losses today, and the SEC could freely focus regulatory enforcement efforts on the worst participants," Toomey writes.
According to Toomey, the SEC has not properly explained how the Howey and Reves tests apply to the products of crypto lending platforms that pay interest to customers making crypto deposits. Instead, he stressed, the SEC chooses selective regulation.
The senator mentioned the recent insider trading allegations against a former Coinbase employee, saying that the SEC has a clear opinion on the status of securities of these assets, but did not make this opinion public before the enforcement actions began.
He notes that, based on the dubious assumption that most digital assets are securities, the Securities and Exchange Commission not only makes it difficult for companies with good intentions to comply with requirements, but also does not provide reliable protection for customers with its style of forced regulation.
As a result, Toomey said, the SEC's continued refusal to give the crypto community clarity on regulation, combined with the "decidedly sluggish pace of enforcement," is hurting both investors and innovation in general.
In conclusion, Toomey asks Gensler nine questions with a request to answer them by August 9. Among them is a proposal to publicly identify other large crypto-credit companies that are not registered with the SEC; explain why the Commission did not classify the remaining 16 of the 25 digital assets traded by a Coinbase employee as securities, and other issues.
On May 10, Tumi announced his support for the Law on Innovation and Protection of Stablecoins, which will allow the Federal Deposit Insurance Corporation to support stablecoins in the same way as fiat deposits.
https://coin-signal.com/cryptonews/pat-toomey-blames-sec-for-crypto-lending-platform-crisis/
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