Following the ruling on the U.S. Securities and Exchange Commission (SEC) v. Ripple case regarding XRP, a number of U.S. lawmakers have called on Congress to pass legislation to regulate crypto and uphold the court ruling.
The chairman of the House Financial Services Committee, Patrick McHenry (R-NC), and the chairman of the House Agriculture Committee, Glenn “GT” Thompson (R-PA), issued a joint statement on Friday regarding the SEC v. Ripple case ruling and the need for legislative clarity in the crypto ecosystem.
“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 are what happens when regulators force courts to make policy instead of Congress,” the lawmakers said. They proceeded to urge Congress to pass a bill they introduced that focuses on market structure legislation. “Our comprehensive market structure legislation will give all investors, customers, and market participants the same longstanding protections found in traditional financial markets,” the lawmakers stressed, emphasizing:
“The decision also recognizes what Republicans have said all along: there is a limit to the SEC’s reach. According to the court, digital assets may not be inherently securities, but can be offered as part of an investment contract in certain circumstances, which our legislation acknowledges.”
“Gary Gensler’s SEC cannot continue to pursue its regulation by enforcement approach, which only harms investors and creates uncertainty,” they added. The lawmakers have repeatedly criticized the SEC chairman for regulating the crypto industry by enforcement. There is also a bill in Congress to remove him as the chair of the securities regulator. Moreover, Gensler has said that all crypto tokens, other than bitcoin, are securities.
“Our digital asset market structure bill is essential to filling the regulatory gaps highlighted in this decision. We remain committed to ensuring all Americans have robust protections in the digital asset marketplace. We look forward to advancing this legislation out of our respective committees this month,” McHenry and Thompson concluded.
U.S. Senator Cynthia Lummis (R-WY) similarly urged Congress to expedite the passage of the Lummis-Gillibrand Responsible Financial Innovation Act. On Friday, she tweeted her statement in response to the ruling. “I applaud the decision of the Southern District of New York finding that crypto assets traded in secondary markets may not be investment contracts. This is the position that section 501 of the Lummis-Gillibrand Responsible Financial Innovation Act has taken from the beginning,” her statement reads. The senator added:
“The decision confirms the need for Congress to deliver a clear regulatory structure for the crypto asset industry that provides the highest level of consumer protection. We need to pass Lummis-Gillibrand to uphold the Howey test as interpreted by the Southern District of New York.”
The Lummis-Gillibrand Responsible Financial Innovation Act was recently revised. The bill was first introduced in June last year. Lummis reintroduced it in the Senate on July 12.
Congressman Tom Emmer tweeted on Thursday: “The Ripple case is a monumental development in establishing that a token is separate and distinct from an investment contract it may or may not be part of. Now, let’s make it law.”
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