The recent court SEC vs XRP ruling by Judge Analisa Torres has caused a stir among lawmakers and activists in the country. They now strongly urge Congress to create a stable legal framework for digital assets regulation in order to protect investors, as there remains significant ambiguity in the status of cryptocurrency in the country.
SEC enforcement approach creates uncertainty regarding investment
The need for a stable legislative framework for crypto investments arises from the high uncertainty regarding the status of digital assets. Recognizing the security status of digital assets and processes regarding contractual operations involving tokens will make crypto operations smooth and secure in the country.
Moreover, as one legislator says, the crypto industry has long been regulated by the SEC by the use of sheer enforcement. For legislative clarity in the crypto market, there has to be intervention by Congress. Patrick Mc Henry, the House Financial Services Committee Chairman, and Glen ‘GT’ Thompson, chairman of the House Agricultural Committee, have issued a joint statement explaining the purpose of such action, the need for which springs from the SEC vs XRP ruling scenario.
“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.”
Wyoming Senator takes to Twitter urging legal action by Congress
A longstanding advocate of Bitcoin, US senator Cynthia Lummis has taken to social media to emphasize the tremendous significance of Analisa Torres’ sec vs xrp ruling. Like McHenry and Thompson, she highlights the need for unambiguous documentation of the status of cryptocurrency for the protection of investors in the digital assets market.
“I applaud the decision of the Southern District of New York finding that crypto assets traded in secondary markets may not be investment contracts… 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.”
Significance of Lummis-Gillibrand Bill and Howey Test in the Light of Crypto Industry Ambiguity
Lummis has also pointed out the importance of the Howey test (a legal standard that assesses whether an investment qualifies as a security), referencing the Responsible Financial Innovation Act, widely known as the Lummis-Gillibrand Bill, an initiative introduced by herself and Senator Kirsten Gillibrand. Its purpose is to establish regulatory guidelines and provide the utmost clarity in digital assets aligning them with the Howey Test.
The Lummis-Gillibrand Responsible Financial Act was recently revised. The bill was introduced first in the month of June last year. Lummis made a reintroduction of the Act in the Senate on July 12.
Following the immense stir caused in the political and legal sector of the US stemming directly from the SEC vs XRP ruling by Torres, the statement of McHenry, Thompson, Lummis, and others, it only remains to be seen how far Congress responds to the call for legal action. The lawmakers and activists are consistently pointing out that the most important issue in the hands of Congress is to make clear distinctions between what to be considered as security in the case of cryptocurrency and what is not. Nevertheless, a progressive strategy to unleash the complete potential of the crypto industry may very well be on the cards as a consequence of the lawmakers’ united appeal and advocation.
Also Read: Argentina should adopt BTC and dump the dollar says Lawyer.
