In a recent discussion on CNBC’s Squawk Box, Wyoming Senator Cynthia Lummis voiced her concerns about the US Securities and Exchange Commission’s (SEC) approach to cryptocurrency regulations. Lummis criticized SEC Chair Gary Gensler for what she deemed as a counterproductive and problematic stance towards the cryptocurrency market.
The Senator highlighted the challenges facing the US crypto industry, exacerbated by the SEC’s current tactics. She called out Gensler for relying on enforcement actions instead of providing clear guidelines, resulting in ambiguity and legal conflicts for digital asset companies.
Lummis emphasized that the SEC’s regulatory framework hinders the growth of the cryptocurrency sector, emphasizing the importance of regulatory clarity. She noted that compared to the EU’s comprehensive crypto laws, the US lags behind and risks losing its competitive edge in the global financial landscape.
Furthermore, Lummis proposed that digital assets like Bitcoin and Ethereum should fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC) rather than the SEC. She argued that the SEC’s classification of digital assets as securities does not apply to decentralized cryptocurrencies like Bitcoin and Ethereum.
In contrast to Lummis, SEC Chair Gary Gensler defended the existing crypto regulations, asserting that the SEC’s focus is on investor protection. He clarified that Bitcoin is not considered a security, a position supported by his predecessor, Jay Clayton. Gensler highlighted the SEC’s approval of Bitcoin Spot Exchange-Traded Funds while remaining ambiguous on Ethereum’s classification.
Regarding necessary changes in crypto regulation, Lummis urged Congress to enact legislation to address regulatory gaps. She proposed revising the wash sale rule to enhance the CFTC’s oversight capabilities in regulating the digital asset space without stifling its innovation potential.
Additionally, Lummis and other lawmakers raised concerns about SEC’s Staff Accounting Bulletin 121 (SAB 121), which they believe imposes unnecessary restrictions on the crypto industry by requiring custodians to treat customer assets as liabilities. They called for the withdrawal of SAB 121 in a letter to Gensler, advocating for a more favorable regulatory environment for the crypto sector.