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Republican Senator Pat Toomey has grilled SEC Chairman Gary Gensler for failing to provide cryptocurrency regulatory clarity in the United States and demanded the factors the agency used to determine cryptocurrencies as securities.
Senator Pat Toomey Wants Clarity on Cryptocurrency Regulation
Senator Toomey also remains concerned about SEC Chairman Gary Gensler’s definition of stablecoins as securities. Per Toomey, stablecoins cannot be classified as securities as it doesn’t meet the legal identification on what a security is.
"To me a stablecoin doesn't meet the second prong of the Howey Test, that there has to be an expectation of profits from the investment. If it doesn't meet the Howey Test, it looks to me like it's not a security. Now maybe you've got a good argument for why some are and some aren't, but...I think we need to have clarity on this.”
Toomey highlighted that the crypto industry has inevitable technological and innovative potential that could transform the finance markets. He assured that he is not against cryptocurrency regulation but that he just wants transparency and objectivity about the regulation of the cryptocurrency industry.
SEC's War With the Crypto Industry
The U.S. SEC has been in a legal war with Ripple Labs since December 2020, claiming that XRP is an unregistered security. In 2020, the regulatory agency sued Ripple Labs, CEO Brad Garlinghouse, and co-founder Chris Larsen for trading the digital asset.
Recently, the agency also threatened to sue Coinbase crypto exchange for its intention to launch a lending service to let customers earn yields on their crypto.