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- Wyoming Senator Cynthia Lummis has voiced strong criticism of the SEC’s current approach to cryptocurrency regulation.
- In an effort to refine the regulatory landscape, she has proposed increasing the role of the Commodity Futures Trading Commission (CFTC) in overseeing digital assets.
- Lummis highlights the need to update existing rules, including the Howey Test, to accommodate the rapidly evolving crypto market.
Senator Lummis advocates for CFTC oversight of Bitcoin and Ethereum, challenging the SEC’s regulatory approach.
Senator Cynthia Lummis Criticizes SEC’s Crypto Regulation
In an interview on CNBC’s Squawk Box, Senator Cynthia Lummis openly criticized SEC Chairman Gary Gensler’s approach to cryptocurrency regulation, labeling his tactics as counterproductive and problematic. She argued that the SEC’s reliance on enforcement actions, rather than providing clear guidelines, has created uncertainty in the industry. This has led to numerous legal disputes for digital asset companies, hindering their growth and disrupting the market’s development.
Push for CFTC’s Increased Role
Senator Lummis firmly believes that Bitcoin and Ethereum should be classified as commodities and regulated by the CFTC rather than the SEC. She pointed out that the SEC’s tendency to categorize all digital assets as securities does not properly fit decentralized cryptocurrencies such as Bitcoin and Ethereum. To enhance regulatory clarity, she urged Congress to enact legislation defining the jurisdiction of different agencies over digital assets.
Legislative Efforts for Regulatory Updates
Lummis, alongside Senator Kirsten Gillibrand, is pushing for changes to the wash sale rule as part of a comprehensive legislative framework to empower the CFTC in the digital asset space. This move aims to provide a more cohesive regulatory environment, ensuring that the crypto industry can thrive without facing unnecessary constraints. She also emphasized the need to modernize the Howey Test, a long-standing measure used to determine whether an asset qualifies as a security, to reflect the current realities of the crypto market.
Criticism of SEC’s SAB 121
Senator Lummis, together with other lawmakers, has strongly opposed the SEC’s Staff Accounting Bulletin 121 (SAB 121), which requires crypto custodians to list customer assets as liabilities. In a letter addressed to Chairman Gensler, they argued that SAB 121 imposes excessive regulatory burdens on the industry, potentially stifling its growth and innovation. The lawmakers called for the withdrawal of SAB 121, emphasizing that it is crucial to create a balanced regulatory environment that fosters both investor protection and industry growth.
Conclusion
Senator Cynthia Lummis’s criticisms and proposals highlight the pressing need for clearer and updated regulations in the cryptocurrency sector. By advocating for the CFTC’s oversight of Bitcoin and Ethereum and calling for legislative changes, Lummis aims to establish a more stable and predictable regulatory framework. This approach is intended to support the continued growth and innovation of the digital asset industry, ensuring that the United States maintains its competitive edge in the global financial market.