US Congressman Ritchie Torres Pushes for an Independent Investigation into the SEC’s Handling of Crypto

US Congressman Ritchie Torres recently requested for two separate independent investigations into the US SEC. 

According to two open letters that Rep. Torres sent, the Securities and Exchange Commission has expressed a “haphazard and heavy-handed approach to digital assets.”  

The Congressman now wants qualified investigators to determine whether the SEC was doing its job adequately.

The SEC’s crypto crackdown caused many to start asking questions

The US SEC’s actions against the crypto industry have been rather harsh for years, but in the last several months, the regulator has been cracking down on the industry stronger than ever before. 

Dozens, if not hundreds, of companies that launched cryptocurrencies, were forced to pay fines for allegedly launching securities.

Some of the legal battles the SEC has been locked in have lasted for years, such as its Ripple lawsuit. 

The SEC also filed lawsuits against Binance, and even Coinbase, which has been regulatory compliant for years. However, SEC Chair Gary Gensler claims that Coinbase has been offering securities.

More than that, the regulator has been rejecting Bitcoin ETF applications for a decade now, despite ever-growing demand. It would always come up with a new excuse as to why the financial product proposals were not good enough. 

It even rejected the proposals made by massive fund managers, such as BlackRock and Fidelity. An argument could be made that, if anyone knows how to put together a proper ETF proposal, it would be these firms.

However, the regulator rejected them like all others, and its actions have heavily disrupted the crypto industry in the United States.

US SEC comes under the spotlight for its questionable decisions

Rep, Torres sent two separate letters asking for two independent investigations — one to the SEC’s Inspector General, Deborah Jeffrey, and another to the Government Accountability Office’s Comptroller General, Gene Dodaro.

🚨 @SECGov is acting like an overzealous traffic cop arbitrarily ticketing drivers while keeping the speed limit a secret.

It prefers to communicate by enforcement rather than by rules or guidance. But that's no way to regulate digital assets.

I'm calling for an investigation. https://t.co/ZbiSk6oQ9F pic.twitter.com/n0hijAREDC

— Rep. Ritchie Torres (@RepRitchie) July 13, 2023

Despite all of the questionable moves described above, Rep. Torres referred to a different decision made by the SEC in his letters. 

The regulator recently issued a special-purpose broker-dealer license to a company called Prometheum. He called it a 

“trading digital assets platform that does not trade digital assets.”

The government official found the circumstances under which the license was issued to be rather unusual. Furthermore, he argued that the regulator failed to create a rigorous but workable process for registering digital asset platforms.

The letters say: 

“The dubious decision to license a deceptive digital assets platform reflects the latest attempt by Chair Gary Gensler to politicize the registration process to an extent seldom seen in the SEC’s history. When it comes to trading platforms that operate in the real world, the SEC’s path to registration remains a bridge to nowhere.”

He also described the regulator as an overzealous traffic agent who arbitrarily tickets drivers for speeding while keeping everyone endlessly guessing about the speeding limit. 

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