A US congressman has called for investigations into the Securities and Exchange Commission (SEC) over its approach to cryptocurrency regulation.
SEC Criticized for ‘Sanction-based’ Crypto Regulation
In two letters made public, Rep. Ritchie Torres criticized the SEC for preferring to regulate digital assets through enforcement actions and sanctions rather than providing proper rules and guidance.
He sent letters to the SEC Inspector General and the Government Accountability Office Inspector General requesting separate probes.
Torres said on Twitter: “The SEC acts like an overzealous traffic cop who arbitrarily fines drivers while keeping the speed limit secret. It prefers communicating through sanctions rather than rules or guidance. However, this is not the way to regulate digital assets. I request that investigations be initiated.”
Recent Criticism of SEC Approach
The SEC has faced intensifying criticism over its approach to crypto regulation.
Its lawsuits against Binance and Coinbase, and the Ripple case, have drawn accusations that the regulator lacks clarity and specificity.
A judge’s ruling that Ripple’s XRP sales are not securities offerings dealt a blow to the SEC’s credibility, prompting calls for a more balanced approach.
Some lawmakers have argued that the SEC should provide proper rules and guidelines instead of relying solely on enforcement actions.
Potential Impact of SEC Probes
If initiated, the investigations called for by Rep. Torres could provide insight into the SEC’s strategies and regulatory approach going forward.
The SEC’s actions will continue to significantly impact the rapidly evolving cryptocurrency and blockchain industry.
Regulators must balance the need for oversight against stifling innovation in this emerging sector.
Greater clarity, consistency and engagement with the industry could help build trust and foster long-term growth.
But arbitrary, sanction-based regulation may only breed resentment and stall adoption of beneficial crypto technologies.
