- Senator Lummis has criticized the SEC’s lawsuit against Kraken.
- The Senator faulted the commission’s regulatory approach.
- Lummis promised to vouch for clear regulation rules in the crypto industry.
U.S. Senator Cynthia Lummis has taken a jab at the Securities and Exchange Commission (SEC), faulting the regulator’s recent enforcement action against cryptocurrency exchange Kraken.
Senator Lummis’s sentiments come on the heels of a wide-ranging lawsuit filed by the SEC against Kraken on November 20. The regulator charged the exchange with multiple securities law violations and alleged that Kraken settled operational expenses from accounts holding its customers’ funds.
According to Senator Lummis, this action depicts the SEC’s “ruling by enforcement” approach, which “cannot continue.”
Senator Lummis Criticizes SEC
Taking to 𝕏 (formerly Twitter) on November 21, the senator didn’t mince words while criticizing the SEC’s lawsuit against Kraken, arguing that crypto asset companies have repeatedly tried to rely on the SEC’s guidance only for the regulator to mete enforcement actions against them.
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Per the senator, the SEC’s approach only causes unnecessary consumer harm.
“It is time for Congress to pass a regulatory framework to provide clear rules to the SEC on what is a security and what is a commodity. The Lummis-Gillibrand Responsible Financial Innovation Act will rein in the SEC and allow financial innovation to thrive in the United States.” Senator Lummis stated.
Senator Lummis’s remarks align with recent concerns by different groups of U.S. lawmakers questioning the SEC’s “regulation via enforcement” approach in the crypto sector.
Regulation By Harassment?
While appearing at a hearing held by the U.S. House Committee on September 7, SEC chair Gary Gensler took heat from lawmakers over his approach toward regulating crypto.
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Notably, Rep. Tom Emmer engaged Gensler in a heated argument, labeling him an impartial regulator taking a “regulation by harassment approach“ toward digital assets. The representative accused the SEC chair of working to consolidate his power to the detriment of the financial future of the U.S.
For its part, Kraken stated that the SEC is demanding compliance with a non-existent regime.
Read how Kraken co-founder reacted to the SEC’s lawsuit:
Kraken Co-Founder Slams SEC for Going “Back for Seconds”
Stay updated on why SEC’s Gensler demands more accountability in crypto:
Gary Gensler Makes Demand for More Accountability in Crypto
