Senator Cynthia Lummis (R-WY) has castigated the Securities and Exchange Commission (SEC) for its inability to find common ground in its relationship with cryptocurrency exchanges. Lummis wrote on Twitter that the US SEC has been unable to register crypto exchanges. Neither has the commission been able to provide a clear legal pathway that shows the community the tokens that it considers commodities and those that are securities.
Lummis added that the SEC fell short of expectations in its mandate to provide clear guidance for the emerging asset class but has continued to base its operations on regulation by enforcement, an approach that the senator considers to be “harmful to consumers.”
You can’t ignore the rules because you don’t like them
In the Twitter post made on June 6, Lummis responded to a statement by the SEC’s Director, Division of Enforcement, Gurbir S. Grewal, who said,
“You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones; the consequences for the investing public are far too great.”
Grewal was referring to the SEC’s suit against Coinbase, the US cryptocurrency exchange that he said made a lot of gains at the expense of the investors, who the director claimed were deprived of protection while Coinbase made billions of dollars.
Moving against crypto exchanges
On June 6, the SEC filed a lawsuit against Coinbase. A day after filing a similar lawsuit against Binance and its CEO, Changpeng Zhao. In the suit against Coinbase, the regulator accused the exchange of operating an unregistered national securities exchange, broker, and clearing agency “and for failing to register the offer and sale of its crypto asset staking-as-a-service program.” The SEC’s stance has also seen the regulator move against other exchanges operating in the US such as Kraken and Gemini.
The SEC has taken action against several crypto exchanges in recent months after labeling most of the digital assets that they deal with as securities. It is instructive that Bitcoin is the only cryptocurrency that US regulators consider a commodity.