The U.S. Senator Pat Toomey criticized the Securities and Exchange Commission (SEC) for taking too long to establish the crypto regulation on cryptocurrency firms, even as some of those firms went out of business.
In a letter to SEC Chair Gary Gensler, Toomey stated that “Had the SEC responded to calls for clarity on how it would apply existing securities laws to novel digital assets and services, things could have been different.”
“Companies could have adjusted product offerings accordingly, preventing investor losses today, and the SEC would have been free to focus enforcement efforts on the worst actors,” the senator added.
In addition to mentioning firms that often promised enormous, seemingly unsustainable interest rates to depositors, Toomey singled out Celsius Network which put huge amounts of investor funds in jeopardy.
Toomey claimed in the letter that despite requests from him and other lawmakers, as well as from crypto companies themselves, the SEC has refused to provide enough clarification regarding which digital assets fall under the definition of securities.
A few days back, the U.S. Department of Justice (DOJ) charged a former Coinbase employee with insider trading. Responding to this, Toomey tweeted that the “enforcement action is the perfect example of the SEC having a clear opinion on how and why certain tokens classify as securities.
Toomey stated that the SEC’s regulation-by-enforcement approach to digital assets poses a significant challenge for any well-intentioned innovator seeking to comply with existing laws and regulations.
“Providing regulatory clarity prior to enforcement would benefit regulators and investors alike,” Toomey added.