U.S. Lawmakers Urge SEC to Stop Regulating Crypto by Enforcement
- U.S. lawmakers are calling on the SEC to stop regulating crypto by enforcement.
- They argue that the SEC's current approach is unfair and arbitrary.
- They are urging the SEC to provide clear rules and guidance for the crypto industry.
- The SEC has not yet responded to the lawmakers' letters.
U.S. lawmakers Ritchie Torres (D-NY) and Warren Davidson (R-OH) have called on the U.S. Securities and Exchange Commission (SEC) to drop its regulatory assault on the crypto industry following the landmark ruling in the SEC v. Ripple case.
In a letter to SEC Chair Gary Gensler, Torres argued that the SEC’s “regulation by enforcement” approach has been “a dreadful day in court.” He pointed to Judge Analisa Torres’ ruling, which found that the SEC had failed to provide fair notice to the crypto industry and had “indiscriminately declared all crypto assets, except bitcoin, to be securities.”
Davidson echoed Torres’ concerns, saying that the SEC’s approach has “created confusion and uncertainty for investors, innovators, and regulators.” He urged Gensler to “embrace a different approach” and work with Congress to provide clarity on the regulation of crypto assets.
The SEC has not yet responded to the lawmakers’ letter. However, it is likely that the agency will appeal Judge Torres’ ruling. If the SEC is successful in appealing the ruling, it could have a significant impact on the future of the crypto industry.
SEC Reserves Right to Appeal, but Chances of Immediate Appeal Are Low
The SEC has said that it reserves the right to appeal Judge Torres’ ruling. However, the chances of an immediate appeal are low. The SEC would need to file a notice of appeal within 30 days of the ruling, and it would then need to obtain a stay from the court before it could appeal the ruling to the Second Circuit Court of Appeals.
Even if the SEC is able to obtain a stay, it is unlikely that the appeal would be heard anytime soon. The Second Circuit Court of Appeals has a backlog of cases, and it could take several months or even years for the case to be heard.
In the meantime, the SEC will continue to regulate crypto assets through its enforcement actions. However, the Torres Doctrine could make it more difficult for the SEC to bring enforcement actions against crypto companies.
Lawmakers Call for Congress to Provide Clarity on Crypto Regulation
In addition to calling on the SEC to drop its regulatory assault on crypto, Torres and Davidson have also called on Congress to provide clarity on the regulation of crypto assets. They argue that Congress is the best place to provide this clarity, as it can take into account the views of all stakeholders in the crypto industry.
It is unclear whether Congress will be able to provide clarity on the regulation of crypto assets anytime soon. However, the Torres Doctrine could put pressure on Congress to act. If the SEC is unable to bring enforcement actions against crypto companies, it is likely that Congress will be asked to step in and provide clarity on the regulation of crypto assets.
The Future of Crypto Regulation Is Uncertain
The future of crypto regulation is uncertain. The SEC could appeal Judge Torres’ ruling, but the chances of an immediate appeal are low. The SEC could also continue to regulate crypto assets through its enforcement actions, but the Torres Doctrine could make it more difficult for the SEC to do so.
Ultimately, the future of crypto regulation will likely depend on Congress. If Congress is able to provide clarity on the regulation of crypto assets, it could help to create a more stable and predictable environment for the crypto industry. However, if Congress is unable to provide clarity, the regulatory landscape for crypto assets could remain uncertain for the foreseeable future.
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