US Congressman Ritchie Torres has written a scathing letter to the SEC Chair, Gary Gensler, urging SEC to stop its assault on cryptocurrencies. In the aftermath of a decisive lawsuit loss against Ripple Labs, wherein the court ruled XRP was not a security, Torres questioned the SEC’s continued, harsh scrutiny of digital assets in one of his recent letters.
The Bronx representative criticized the SEC’s usage of the Howey Test, suggesting it was applied haphazardly. He asserted the ruling heralded the return of strict application, providing a regulatory perspective that transcends the simplistic view of treating all cryptocurrencies as securities. He further underscored that certain crypto assets, even though they aren’t securities themselves, could be part of investment contracts that fall within the SEC’s purview.
Torres’ letter exposes the mounting frustration over the SEC’s perceived failure to provide the industry with clear guidelines. Amid this regulatory ambiguity, the congressman’s intervention throws a much-needed spotlight on the direction crypto regulations should take, sparking a critical discourse in the rapidly evolving digital asset landscape.
Accusations of politicization and unjust practices
Cryptopolitan reported earlier that Torres demanded two separate independent investigations into the SEC for its alleged heavy-handed and disorganized approach to digital assets. Specifically, he accused Gensler of politicizing the registration process by granting Prometheum, a digital assets platform that does not trade in digital assets, a special purpose broker-dealer (SPBD) license.
Torres described the SEC’s decision to grant Prometheum the SPBD license as a dubious attempt by Gensler to politicize the registration process in a way unprecedented in SEC history. He further claimed that the SEC was “acting arbitrarily” in its crypto regulation, comparing it to an overzealous traffic agent whose inconsistent enforcement leaves drivers guessing the speed limit.
Moreover, Torres requested earlier that the SEC Inspector General, Deborah Jeffrey, probe the “unusual backroom deal” granting Prometheum unique privileges not extended to other cryptocurrency exchanges. He suggested that Prometheum was merely a Potemkin platform, acting as a timely talking point for crypto critics instead of providing a genuine trading platform for customers.
Concluding his recent letter to the SEC Chair, Torres asked the agency to channel its energy to where it belongs: perpetrating serious transgressions like fraud, market manipulation, and the misappropriation of customer funds.
Nonetheless, whether the SEC will adjust its stance or maintain its rigorous approach is a development that will be closely monitored in the coming months.
