According to Senator Pat Tomey, famous for his vocal support of the crypto industry, the United States Securities and Exchange Commission (SEC) could have prevented the loss of $ 12 billion in assets by investors who made trust Celsius, a crypto lending platform, which froze their deposits in June.
A official letter de Toomey to SEC Chairman Gary Gensler, dated July 26, suggested that the Commission’s failure to clarify how it would apply existing securities laws to digital assets and services would have undesirable repercussions. As Toomey writes:
“Companies could have adjusted their product offerings accordingly, preventing investor losses today, and the SEC would have been free to focus its enforcement efforts on the worst performers.”
According to Toomey, the SEC failed to properly explain how the Howey and Reves tests applied to crypto lending platform products that paid interest to clients making crypto deposits. Instead, he pointed out, the SEC chooses to regulate through selective enforcement.
The senator mentioned the recent insider trading charges against a former Coinbase employee, saying the SEC had a clear opinion on the status of the securities of these assets, but it did not disclose that opinion publicly before launching a lawsuit.
Starting from a dubious assumption that most digital assets are securities, he notes, the SEC both makes it difficult for well-meaning companies to comply and offers little protection for customers with its style of regulation by enforcement.
As a result, the SEC’s continued refusal to clarify regulations for the crypto community, combined with “a seemingly slow pace of enforcement,” is not hurting investors and innovation in general, according to Toomey.
In conclusion, Toomey poses nine questions to Gensler with a request for an answer by August 9. Among them is the proposal to publicly identify other major crypto lending companies that do not hold any registration with the SEC; explain why the Commission did not include 16 of the 25 digital assets traded by the Coinbase employee in its charges, and others.
May 10, Toomey revealed his support for the Stablecoin Innovation and Protection Act, which would allow the Federal Deposit Insurance Corporation to back stablecoins in a manner similar to fiat deposits.