New York politician Ritchie Torres penned an open letter to the US Securities and Exchange Commission (SEC) chair Gary Gensler. The Democrat congressman escalated his disapproval of SEC’s preference for regulatory by enforcement approach following the Ripple ruling by Judge Analisa Torres.
The politician decried the SEC assault on the crypto industry while failing to offer clear guidance to the digital assets operators. He references the SEC’s loss in the legal battle where Judge Toress observed that XRP offered by Ripple Labs for retail sale is not a security.
SEC Loss in Ripple Ruling Caused by Sloppy Application of Howey Test
Torres’ letter on Tuesday, July 18, termed the regulation by enforcement suffered a dreadful experience in the court. The framing of the letter echoes the longtime criticism lodged by industry executives, crypto advocacy groups, and fellow congress members.
Congressman Torres revisited the ruling in SEC v Ripple Labs where the learned judge’s summative judgment ruled that XRP is neither a security nor its sales when offered via crypto exchanges. The politician lauded Judge Torres’ reasoning, reflecting a rigorous deployment of the Howey Test as the legal standard to identify securities. He regrets that SEC applies sloppily.
The congressman reiterated that Judge Torres clearly observed that digital assets should not be labeled as securities. As such, SEC lacks the legal authority to regulate the cryptocurrencies untethered from the actual security offering.
Congressman Consider Ripple Ruling as Crashing SEC’s Argument in Lawsuit Against Crypto Exchanges
Congressman Torres tore into the Gensler speech on Monday, expressing the ruling as disappointing. The chair indicated that the SEC was evaluating the options it would pursue. Torres termed the SEC’s odds as diminishing to lodge an immediate appeal since the issues raised mandate time intensive fact-finding process.
The Politician reiterated that the precedent set by Judge Torres would reign supreme. He considers the ruling entrenching the Torres Doctrine that equates to crashing the tenuous legal foundation SEC cites to sue Coinbase. A review of the lawsuit initiated against Coinbase saw the SEC label several top crypto assets as securities, including Cardano (ADA), Polygon (MATIC), and Solana (SOL).
SEC’s Chair Challenged to Reassess Assault on Digital Assets
Torres challenged SEC to consider reassessing the regulatory assault on digital assets guided by the Torres doctrine. Torres’ criticism of the SEC’s approach to regulating digital assets replicates the equally critical message conveyed by Inspector General Deborah Jeffrey. Also, Comptroller General Gene Dodaro would urge investigations into the unusual approval portrayed by SEC to the crypto broker platform Prometheum on Thursday.
Torres lamented that the SEC approval process portrays the mere showcasing of propaganda theatre. He termed the move as one delivering the illusion of sustaining regulatory clarity. Instead, the politician considered the registration process a bridge that led other firms to the den of enforcement actions.
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