US Senator John Hickenlooper (D-CO) says it’s time for the U.S. Securities and Exchange Commission (SEC) to establish rules specifically designed for crypto.
In a letter to SEC chair Gary Gensler, the Democrat Senator says that clear and transparent rules create an environment that protects crypto investors while promoting financial innovation in the country.
“I write to urge the SEC to issue regulations for digital asset securities through a transparent notice-and-comment regulatory process.
Whatever the risks and benefits of these new assets might be, existing laws and regulations were not designed to deal with how digital assets are being used in the market.”
Senator Hickenlooper also highlights that the application of existing rules to a new asset class will likely do more harm than good to the crypto industry.
“Currently, digital markets do not have a coordinated regulatory framework. This creates uneven enforcement, and deprives investors of a clear understanding of how they are protected from fraud, manipulation and abuse.
At the same time, as you have repeatedly noted, existing securities regulation does not cleanly apply. Retail investors, in some circumstances, may not be getting the disclosures necessary to comprehend risks associated with digital assets since releasing such information material to investors is not required by existing rules. Applying the old rules to the new market could inadvertently cause financial services to be more expensive, less accessible, and the SEC’s disclosure regime to be less useful to the American people.”Â
At the top of his list of concerns, Senator Hickenlooper wants the SEC to make an official distinction between crypto assets that are securities and the ones that are not.
“Accordingly, the SEC should take action including, but not limited to:
- clarifying what types of digital assets are securities;
- addressing how to issue and list digital securities;
- determining what disclosures are necessary for investors to be properly informed;
- establishing a registration regime for digital asset security trading platforms; and,
- setting rules on how trading and custody of digital assets should be carried out.”
You can read Hickenlooper’s letter to the SEC here.
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