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A US senator criticizes the chairman of the United States Securities and Exchange Commission (SEC) for his approach to regulating the digital asset space.
In a new letter to SEC Chairman Gary Gensler, Sen. Pat Toomey of Pennsylvania says investors in the new space need clear rules and guidance rather than harsh enforcement and fines.
“For investors to benefit from a fair and competitive market, regulators must proactively provide rules of conduct to the industry. Unfortunately, the Securities and Exchange Commission (SEC) has instead adopted an app-based regulatory strategy in this area. “
Toomey adds that during the Senate Banking Committee hearing on September 24, Gensler said that some crypto assets are considered commodities while others are considered securities. The US Senator is now asking Gensler to find out what sets these crypto assets apart.
“Please identify the specific characteristics that distinguish a cryptocurrency that is a security from one that has been considered a commodity. “
Toomey also asks if Gensler and the SEC view stablecoins like Tether (USDT) and USD Coin (USDC) as securities.
“Are you claiming that such a stablecoin constitutes an ‘investment contract’ and is, therefore, a security? If so, could you please explain why you think such a stablecoin would meet the ‘wait for profit’ part of the Howey test? “
The Howey Test was established in a Supreme Court case and determines whether certain transactions qualify as investment contracts and are subject to securities laws.
Toomey also says his concerns about the lack of clarity in the regulatory space are shared by others, including big names like SEC Commissioners Hester Peirce and Elad Roisman.
“My concerns about the SEC’s lack of regulatory clarity are shared by others, including the SEC commissioners. In recent enforcement action, SEC commissioners Hester Peirce and Elad Roisman said they were “disappointed” by the SEC’s inability to explain which digital assets were securities.
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Featured Image: Shutterstock / QinJin
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