The recent ruling in the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Ripple indicates Congressional legislation is necessary for the crypto space, according to two American lawmakers.
In a new op-ed in The Hill, US Representatives Dusty Johnson (R-S.D.) and French Hill (R-Ark.) say Judge Analisa Torres’ decision about XRP “exposes the inadequacies in the current regulatory framework.”
Torres ruled that Ripple’s automated, open-market sales of XRP, referred to as programmatic sales, did not constitute security offerings, contrary to what the SEC alleged. Although, she favored the SEC’s claim that Ripple’s sale of XRP directly to institutional buyers constituted a securities offering.
In their op-ed, Johnson and Hill criticized SEC Chair Gary Gensler’s previous assertions that every token besides Bitcoin (BTC) is a security.
“[Judge Torres’] holdings directly counter Mr. Gensler’s position that ‘most’ digital assets are inherently securities and lend credence to a growing bipartisan view that the Howey test for determining securities is unclear.
If other courts adopt Judge Torres’ reasoning and conclude that certain digital assets are not securities and their sale or ‘airdrop’ are not securities offerings, the digital asset market will continue operating outside the SEC’s regulatory framework and leave consumers without the protections they deserve.
While the court’s ruling certainly damages Mr. Gensler’s approach, it is by no means a slam dunk. For many, the ruling has elicited even more confusion. Legislation from Congress is the only solution.”
The Republican lawmakers point to their recent introduction of the Financial Innovation and Technology for the 21st Century Act as an effort to remedy the space’s current legislative blind spots.
House Committee on Agriculture Chair Glenn Thompson (R-PA), who introduced the legislation along with Hill and Johnson, says the bill seeks to provide the crypto markets with a “much-needed regulatory framework” that can protect investors and bolster America’s position in the nascent industry.
Democratic representatives, however, say that the proposed law is taking resources away from issues that should be prioritized by the House Agriculture Committee, arguing the legislation represents “a handout to crypto exchanges, Wall Street, and Silicon Valley venture capitalists at the expense of American consumers and retail investors.”
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