Wyoming Senator Cynthia Lummis, a supporter of digital assets, has expressed disapproval of the way the US Securities and Exchange Commission (SEC) is handling cryptocurrency regulations. Speaking on CNBC’s Squawk Box, Lummis criticized SEC Chair Gary Gensler’s approach towards the cryptocurrency market, stating that it was counterproductive and posed issues.
Senator Cynthia Lummis Criticizes US SEC’s Management of Crypto Regulations
During the conversation, the Senator emphasized that the US crypto sector faces numerous challenges, which are exacerbated by the SEC’s current strategies. Lummis directed her criticism at SEC Chair Gary Gensler for his regulatory tactics in the sector, which she believes lean more towards enforcement actions rather than providing clear directives.
She highlighted the resulting uncertainty, with many digital asset companies getting entangled in legal battles instead of having clear regulatory frameworks to abide by.
Senator Cynthia Lummis pointed out that the SEC has been a significant obstacle to the growth of the cryptocurrency industry despite the necessity for regulatory clarity. She mentioned that the existing legal structure is insufficient and lags behind advancements, especially when compared to the EU, which instituted a comprehensive set of crypto laws in 2023. Lummis cautioned that the US risks losing its standing in the global financial services arena if regulatory shortcomings are not promptly addressed.
“CFTC Oversight Is Appropriate for Crypto Assets”
Lummis also addressed the classification of digital assets, suggesting that Bitcoin and Ethereum should be categorized as commodities falling under CFTC jurisdiction rather than the SEC.
She argued that the SEC’s tendency to view digital assets as securities does not align with decentralized cryptocurrencies like Bitcoin and Ethereum.
Senator Cynthia Lummis emphasized the need for Congress to introduce appropriate legislation delineating the roles of different agencies in overseeing digital assets. She noted that while some assets may fall within the CFTC’s jurisdiction, a clear and updated regulatory framework is essential for the market. Lummis also highlighted the necessity to revisit the Howey Test to accommodate the evolving landscape of the crypto market.
Gary Gensler’s Position on BTC and ETH
In contrast to Senator Cynthia Lummis, SEC Chair Gary Gensler maintains that the US already adheres to crypto regulations. In an interview, Gensler defended his stance against criticism from industry stakeholders, asserting that disapproval of existing rules does not signify their absence.
He stressed the SEC’s commitment to safeguarding investors, noting that many crypto firms have thrived on public interest in digital assets without offering adequate disclosures.
Gensler clarified that Bitcoin is not classified as a security, a position supported by his predecessor Jay Clayton. This distinction, according to Gensler, enabled the SEC to approve the launch of Bitcoin Spot Exchange-Traded Funds (ETFs) earlier this year. Regarding Ethereum, Gensler has largely remained silent on its categorization, although regulatory decisions on Ethereum ETFs suggest it is treated as a commodity.
Lummis Advocates for Reforms in Crypto Regulation
The Wyoming Senator asserts that legislative changes are imperative to address these gaps. She referenced a joint plan with Senator Kirsten Gillibrand to revise the wash sale rule to bolster funding for the CFTC and enhance its oversight of the digital asset domain.
She explained that this initiative would enable a comprehensive regulatory approach to the crypto sector without compromising its potential.
Moreover, Senator Cynthia Lummis and several other legislators have also voiced concerns about the SEC’s Staff Accounting Bulletin 121 (SAB 121), which mandates crypto custodians to report customer assets as liabilities. Lawmakers demanded in a letter to Gensler that SAB 121 be repealed, citing its excessive regulatory constraints on the crypto industry.
The original article can be found here on CoinGape.