U.S. Congressman Urges SEC to Reconsider Aggressive Stance on Cryptocurrencies
- Shams Ul Zoha
- July 19, 2023
- 12:41 pm
WHAT YOU SHOULD KNOW
- U.S. Representative Ritchie Torres from New York sent a letter to SEC Chair Gary Gensler, urging the agency to reconsider its hardline stance on cryptocurrencies.
- The letter highlights concerns about the SEC’s application of the Howey Test, a standard used to determine whether certain transactions qualify as “investment contracts.”
- The regulatory landscape for cryptocurrencies in the U.S. remains uncertain, especially after the court ruling that certain digital asset transactions fall outside the SEC’s regulatory purview.
U.S. Representative Ritchie Torres, a Democrat from New York, has written a letter to SEC Chair Gary Gensler, urging the agency to reconsider its aggressive approach towards cryptocurrencies. This comes amidst the SEC’s actions against major players in the industry, including Coinbase Global Inc and Binance. Torres questions whether the SEC intends to review its hardline stance on cryptocurrencies, especially in light of the recent court ruling that XRP does not qualify as a security.
In his letter, Torres raises concerns about the SEC’s application of the Howey Test, which is used to determine whether certain transactions are “investment contracts.” He argues that the SEC has been careless in its use of this test and calls for a more meticulous approach. The recent court ruling on the XRP lawsuit is seen as a signal of a potential shift in the SEC’s regulatory approach, as it highlights that while crypto assets themselves may not be securities, they can be part of investment contracts that fall under the classification of securities.
The letter also highlights the judge’s criticism of the SEC’s failure to provide adequate notice to the industry regarding regulatory boundaries. The regulatory landscape for cryptocurrencies in the U.S. remains uncertain, and Torres’ letter adds to the ongoing discussions about how the SEC should approach the regulation of digital assets.
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