US Congressman Urges Probe into SEC’s Handling of Cryptocurrency Industry

Congressman Ritchie Torres recently shared his request for independent investigations into the operations of the U.S. Securities Exchange Commission (SEC), criticizing what he perceives as a disorganized and overbearing approach toward the burgeoning cryptocurrency industry.

Prometheum: A Controversial Decision

A significant concern addressed in the Congressman’s letters was the SEC’s contentious decision to grant a special purpose broker-dealer (SPBD) license to Prometheum. 

The trading platform, which paradoxically does not facilitate the trading of digital assets, has been labeled by Torres as a Potemkin platform. This term implies that it serves more as a discussion point for detractors of the crypto industry rather than functioning as a legitimate trading platform for crypto users.

Is Regulatory Clarity a Mirage?

Torres pointed out the lack of clear regulation and guidance, which he believes is crucial for compliance within the industry. He argued that the SEC’s preferred mode of communication has been neither through explicit rules nor guidance, but rather through enforcement. 

This approach, he noted, has led to a lack of clarity regarding the application of securities law to digital assets, leaving industry participants guessing about the rules they should be following.

The Politicization of the Registration Process

The Congressman also voiced his concerns over what he sees as a politically motivated decision by SEC Chair Gary Gensler. According to Torres, Gensler’s move to license Prometheum represents an unwarranted politicization of the registration process – a level of involvement that is rarely seen within the SEC’s historical operations.

Calls for Rigorous, Workable Registration Processes

Torres urgently called for an independent review of the SEC’s strategies towards digital assets. He specifically requested a thorough examination of the SEC’s failure to establish a robust, feasible process for the registration of genuine digital asset platforms. 

Additionally, he urged a probe into what he described as the unusual backroom deal brokered by the SEC with Prometheum. Interestingly, this plea for an inquiry into the SEC’s dealings comes in the wake of Ripple’s recent victory over the infamous SEC in a lawsuit that had been ongoing since 2020.