U.S. lawmaker Ritchie Torres has urged the Securities and Exchange Commission (SEC) to reconsider its approach to regulation in the cryptocurrency industry following Judge Analisa Torres’s landmark ruling, according to a July 18 letter directed at chair Gary Gensler.
On June 13, Judge Torres ruled that the programmatic sales of XRP did not constitute a securities offering. However, the Judge also ruled that XRP sales to institutional buyers did meet that threshold.
Rep. Torres noted that Judge Torres’s ruling provided a “long overdue legal clarity to the chaos of crypto regulation” and suggested that the court decision should be known as the “Torres Doctrine.”
The lawmaker continued that the ruling has “made it crystal clear to the SEC that digital assets are not securities in the abstract and that it lacks the legal authority to regulate digital assets untethered from an actual security offering.”
Rep. Torres further stated that the new ruling would limit the financial regulator’s ability to “make up the law,” and particularly noted that the legal foundation of the Commission’s case against Coinbase has crashed.
He also pointed out the SEC’s failure to provide fair notice to the crypto industry, emphasizing the absence of clear guidance this burgeoning sector has experienced since Gensler assumed his role as the chairman. Rep. Torres said:
“The SEC has chosen to communicate and regulate not by clear rule or guidance but by enforcement actions, often politically timed. The endless stream of contradiction and confusion, as well as the arbitrariness of the enforcement actions themselves, is the opposite of fair notice.”
The congressman concluded with a call for the SEC to concentrate its enforcement activities on the crypto industry’s bad actors and “reassess its continued assault on the crypto industry.”