US Lawmakers Pressure Congress To Pass Crypto Law

Following SEC’s victory over Ripple, several US lawmakers have called on Congress for regulatory clarity regarding the crypto industry.

As one of the lawmakers stated, “Gary Gensler’s SEC cannot continue to pursue its regulation by enforcement approach, which only harms investors and creates uncertainty.”

The Ripple vs SEC Case

Following a lengthy 3-year court battle, the SEC-Ripple case has finally ended with a “partial victory” for the latter. As per the Southern District of New York Court’s ruling, all XRP sales fall under three buckets –  institutional sales, programmatic sales, and other distributions. While the SEC prevailed in the case of institutional sales, Ripple secured a favorable outcome regarding programmatic sales and other distributions. It should be noted that t the SEC still has the option to appeal the court’s decisions in the future.

The Lawmakers Respond

Following the ruling, the Chairman of the House Financial Services Committee, Patrick McHenry (NC-10), and the Chairman of the House Agriculture Committee, Glenn “GT” Thompson (PA-15), issued a joint statement.

“This decision underscores the need for Congress to provide clear rules of the road for the digital asset ecosystem—it’s misguided to think otherwise. The ruling gives large institutional investors greater protections than everyday Americans. Outcomes like this happen when regulators force courts to make policy instead of Congress. Our comprehensive market structure legislation will give all investors, customers, and market participants the same longstanding protections found in traditional financial markets.”

The lawmakers also noted the flaws in the Gensler-led SEC’s regulatory approach since digital assets may not “be inherently securities, but can be offered as part of an investment contract in certain circumstances, which our legislation acknowledges.” The SEC’s one-size-fits-all approach creates uncertainty and harms investors.

The Lummis-Gillibrand Crypto Bill

Echoing her colleagues’ sentiments, Senator Cynthia Lummis urged to pass the Lummis-Gillibrand Responsible Financial Innovation Act, emphasizing the need for regulatory clarity. The bill primarily aims to pass authority over crypto regulation from the Securities and Exchange Commission (SEC) to the Commodities Future Trading Commission (CFTC).

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.