Wyoming Senator Cynthia Lummis, an advocate for digital assets, has expressed disapproval of the US Securities and Exchange Commission’s (SEC) approach to cryptocurrency regulations. In an interview on CNBC’s Squawk Box, Lummis criticized SEC Chair Gary Gensler for what she perceived as unproductive and troublesome behavior towards the cryptocurrency market.
Lummis highlighted the challenges faced by the US crypto industry, which she believes are exacerbated by the SEC’s current tactics. She specifically called out Gensler for relying on enforcement actions rather than providing clear regulatory guidelines, leading to considerable uncertainty and legal disputes for digital asset companies.
The Senator emphasized that the SEC’s actions have impeded the growth of the cryptocurrency sector, stressing the urgency for regulatory clarity. She pointed out the inadequacy of the existing legal framework in keeping pace with advancements, especially compared to the EU’s comprehensive crypto laws implemented in 2023. Lummis cautioned that the US could lose its competitive edge in the global financial services market if regulatory gaps are not promptly addressed.
In advocating for a shift in oversight, Lummis suggested that 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 align with the decentralized nature of cryptocurrencies like Bitcoin and Ethereum.
Furthermore, Lummis called on Congress to develop legislation outlining the roles of different agencies in regulating digital assets. She emphasized the need for an up-to-date regulatory framework and a potential revision of the Howey Test to adapt to the evolving crypto landscape.
In contrast to Lummis, SEC Chair Gary Gensler has defended the existing crypto regulations in the US, asserting that the SEC’s focus is on protecting investors. Gensler clarified that Bitcoin is not considered a security, aligning with his predecessor’s stance, while the classification of Ethereum as a commodity has been implied through regulatory decisions on Ethereum ETFs.
Lummis underscored the necessity for legislative changes to address regulatory gaps, proposing adjustments to enhance the CFTC’s ability to regulate the digital asset space without stifling its innovation potential. Additionally, she and other lawmakers expressed reservations about the SEC’s Staff Accounting Bulletin 121, urging for its withdrawal due to perceived regulatory constraints on the crypto industry.