Securities and Exchange Commission (SEC) head Gary Gensler finds himself on the receiving end as U.S. Senator Pat Toomey of Pennsylvania has criticized his approach in the crypto industry.
Toomey said the crypto industry should be given clear rules and guidance instead of being treated harshly and be bombarded with threats.
He added that to have a fair and competitive marketplace, regulators like the SEC must be proactive in providing clear rules for the crypto industry.
But the Senator is clearly disappointed with how the SEC head is handling the country’s crypto regulations, saying that it creates more problems rather than creating solutions.
Clear rules needed
In the recent Senate Banking Committee hearing, Gensler said that some crypto assets are considered commodities while others are treated as securities. Senator Toomey then asked the SEC head to clarify the differences in these crypto-assets that he was referring to.
“Please identify the specific characteristics that distinguish a cryptocurrency that is a security from one that has been deemed a commodity,” Toomey said. The Senator also asked the SEC head to clarify if Tether and USD Coins are considered securities.
The Howey Test
During the hearing, the ”Howey Test “ was also discussed. This test was established in a Supreme Court case and is used to determine if a transaction can qualify as investment contracts and if they are subject to securities law.
The Senator has also expressed his concern about the vague policies of the regulators, which, according to him, prevent both the crypto industry and the government from reaching a common ground.
This lack of clarity, according to the senator, would only prolong the battle between regulators and crypto businesses.
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