New York Representative Ritchie Torres, a Democrat, has taken a bold stance. He has criticized the United States Securities and Exchange Commission (SEC) and its approach toward crypto regulation.
The move follows what Torres termed a “dreadful day in court” for the SEC, hinting at an ongoing legal battle with Ripple.
Congressman Torres Speaks Out Against the SEC
Rep. Torres penned a letter to SEC Chair Gary Gensler on July 18. He urged Gensler to reconsider the regulatory body’s position on crypto.
Furthermore, the Congressman expressed concern over the SEC’s focus on “bonafide bad actors” rather than “indiscriminately” treating the majority of crypto assets as securities.
“The SEC has chosen to communicate and regulate not by clear rule or guidance but by enforcement actions, often politically timed. The endless stream of contradiction and contusion, as well as the arbitrariness of the entorcement actions themselves, is the opposite of fair notice,” said Rep. Torres.
Rep. Torres said the recent court decision in the SEC vs. Ripple case “resoundingly rejected the regulatory overreach of the SEC.”
A key part of the the ruiling is that cryptos are not securities in themselves. Instead, they qualify as securities under the Howey Test only when sold as part of investment contracts.
This provides clarity to the often-confusing US crypto regulation, a sector growing exponentially with little established legislation.
The SEC has been accused of muddying the waters with mixed messages and a lack of clear guidance. The federal agency often contradicts the Commodity Futures Trading Commission (CFTC) and itself. This confusing stance has led to what Rep. Torres calls a “regulatory assault” on the crypto industry.
Furthermore, Rep. Torres highlights that the SEC, under Chair Gensler’s leadership, has failed to issue a single rule on crypto, only creating more confusion with politically timed enforcement actions.
“I hope that the SEC will find itself so chastened by the court’s decision that it will concentrate the commission’s enforcement energies where it belongs: on the bonafide bad actors who perpetrate serious transgressions like fraud, market manipulation, and the misappropriation of customer funds,” said Rep. Torres.
The congressman’s concerns echo a sentiment held by many within the crypto industry. Indeed, industry leaders argue that a lack of clarity and inconsistent messaging from regulatory bodies only hamper growth and innovation.