As per Pat Toomey, a U.S. Senator who is well known for supporting the industry of cryptocurrency, the Securities and Exchange Commission (SEC) of the United States could be involved in evading the loss of nearly $12B worth in assets belonging to the investors who had faith in Celsius (platform for lending cryptocurrency which halted the deposits in June).
Toomey Holds SEC Responsible for Celsius Bankruptcy
A formal letter issued to Gary Gensler (the chairman of the SEC) by Toomey dated by 26th July, pointed out the incapability of the securities regulator to elucidate the reason for implementing the present securities laws on digital services as well as the assets, that led to the objectionable consequences.
He noted that the firms could have regulated their product offerings under the instructions of the SEC to avoid the investor losses at the present, and the regulator would have been freely concentrating on its enforcement endeavors for the weak players. In the words of Toomey, no proper explanation has been provided by the SEC regarding the Reves and Howey tests’ implementation on the crypto lending venue’s goods that provided interest to the consumers who made the crypto deposits.
Rather, he stressed, the SEC intends to regulate through selective enforcement. He referred to the recent accusations of insider trading against an ex-Coinbase employee, mentioning that a clear stance had been taken by the SEC on the respective assets’ securities status, even then no open disclosure was made by it in advance of initiating the enforcement action.
Senator Poses 9 Questions to the SEC Chairman
Beginning from an uncertain assumption that the digital assets have a status of securities in the majority, the securities regulator makes it troublesome for the good-natured platforms to abide by the laws and does not provide considerable security to the consumers with its style of enforcement-based regulation. Eventually, the constant refusal of the SEC to offer regulatory transparency to the community of cryptocurrency, as well as a seemingly lagging speed of enforcement is harmful to innovation and investors in general, as put by Toomey.
While concluding, Toomey asks 9 questions from the SEC Chair along with a request to answer by 9th August. On 10th May, Toomey appreciated the Stablecoin Innovation and Protection Act with which the Federal Deposit Insurance Corporation would be permitted to return stablecoins just like the fiat deposits.