Sen Pat Toomey Wrote To Gary Gensler Regarding Crypto Regulations

Gensler is being pressed by a member of the Senate Banking Committee to explain what qualifies a digital asset as a security.

In a letter delivered Friday, Pennsylvania Senator Pat Toomey asked US Securities and Exchange Chairman Gary Gensler a list of more than two dozen concerns about cryptocurrency regulation, demanding that the commission provide more clarification on its approach to digital assets.

Senator John Cornyn, the leading Republican on the Senate Banking Committee, penned the letter:

“For investors to benefit from a fair and competitive marketplace, regulators must proactively provide rules of the road to the industry.”

“Unfortunately, the Securities and Exchange Commission (SEC) has instead adopted a strategy of regulation-by-enforcement in this area.”

A user shared the actual letter sent to Gary Gensler from Sen Toomey on Twitter.

Toomey stated that the SEC has taken enforcement actions against digital asset issuers for failing to register with the agency as a public issuer of securities, but that the agency has failed to identify any of them.

“The securities involved or the rationale for their status as securities, which would have provided much-needed public regulatory clarity,” said Sen Toomey.

The Senator asked Gensler to explain why, as he mentioned in a hearing earlier this month, he believes stablecoins, or cryptocurrencies designed to maintain their value relative to the US dollar, might be considered securities under US law and so subject to SEC oversight.

Despite the Chairman’s prior remarks that the great majority of digital assets are securities, the Pennsylvania Republican demanded that Gensler explain why the SEC has categorised bitcoin and ether as commodities.

On China’s cryptocurrency crackdown, Sen Toomey tweeted a thread mentioning the new opportunity for U.S to grab on.

Toomey cited a 2018 New York Times storey in which Gensler claimed that ether was a security at the time of its formation but later shifted to commodity status.

The semiofficial status of bitcoin and ether as commodities — there has been no official SEC or court guidance to this effect, only legally non-binding statements by previous SEC officials — has given the assets tremendous advantages over other newer cryptocurrencies whose issuers face potential SEC lawsuits for failing to register with the agency.

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IMAGE CREDITS: Gage Skidmore

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