Torres Criticizes SEC’s “Reckless Regulatory Assault” on Crypto

Representative Ritchie Torres becomes the latest US lawmaker to level criticism against the SEC and its Chairman Gary Gensler’s position on crypto.

New York Representative Ritchie Torres urged the US Securities and Exchange Commission (SEC) and its Chairman Gary Gensler after “crypto regulation by enforcement had a dreadful day in court.”

Crypto regulation by enforcement had a dreadful day in court. In light of the SDNY’s landmark decision in the Ripple case, @SECGov must reassess its reckless regulatory assault on the crypto industry. My letter to Chair Gensler: pic.twitter.com/Mrk63N4KhH

— Rep. Ritchie Torres (@RepRitchie) July 18, 2023

Rep. Torres is a member of the Congressional Blockchain Caucus.

SEC Should Limit Enforcement Cases to “Bonafide Bad Actors”

In a letter to Chairman Gensler on July 18, Torres asked the agency to limit its enforcement cases to “bonafide bad actors” rather than “indiscriminately” dealing with most crypto assets as securities under its supervision.

Torres’s criticism and motivation to call the SEC out on its “reckless regulatory assault on the crypto industry” followed the landmark court ruling in the SEC’s case against Ripple Labs. The regulator suggested Ripple’s sale of its $XRP token on public exchanges was an offer of securities, leading numerous exchanges to delist the token and its value to plummet.  

However, a ruling by Judge Analise Torres stated the $XRP token is “not necessarily a security on its face.”  

In his letter, Rep. Torres said:

“I’m writing to inquire if the SEC intends to come to terms with the folly of the Commission’s crusade against crypto assets in light of the latest decision by Judge Analisa Torres of the Southern District of New York.”

He added:

“In a landmark legal opinion, Judge Torres resoundingly rejected the regulatory overreach of the SEC, which has been indiscriminately declaring all crypto assets, except bitcoin, to be securities.”

The congressman concluded by saying:

I hope that the SEC will find itself so chastened by the court’s decision that it will concentrate the Commission’s enforcement energies where it belongs: on the bonafide bad actors who perpetrate serious transgressions like fraud, market manipulation, and the misappropriation of customer funds.

SEC Has Failed to Provide Clear Guidance for the Crypto Industry

Rep. Torres, who coincidently shares a last name with the judge presiding over the SEC’s case against Ripple, said:

“Under Chair Gensler, the SEC has not issued a single rule on crypto assets, nor has it given any clear guidance.”

Adding, “All it has done is sent mixed messages, one after the [other], not only contradicting the CFTC but often contradicting itself.”

Torres and other industry experts believe that an immediate appeal by the SEC seems unlikely. The precedent set by the $XRP ruling would jeopardize the agency’s case against Coinbase in particular.

Rep. Torres suggested:

[The SEC] must reassess its reckless regulatory assault on the crypto industry.

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.