Senator Lummis Criticizes SEC’s Crypto Crackdown, Vows To Block Controversial Policies

In a recent interview with Yahoo Finance, Senator Cynthia Lummis expressed her disapproval of the Securities and Exchange Commission’s (SEC) intensified crackdown on the crypto industry throughout 2023. 

Urgency For Crypto Regulation

In the interview, Senator Lummis criticized the aggressive nature of the SEC’s actions, deeming it unnecessary and overreaching. Specifically, Lummis opposed one of the agency’s controversial new crypto policies, “Staff Accounting Bulletin 121,” issued in March 2022. 

As reported by Bitcoinist, the policy requires financial firms holding customers’ crypto assets to hold them on their balance sheets while cautioning investors about the associated risks. 

The Government Accountability Office recently stated that the SEC should have sought approval from Congress for this policy guidance.

Senator Lummis pledged to block the policy from becoming binding, citing it as another example of SEC overreach. Lummis expressed concerns that the bulletin, if implemented, could harm consumers if a digital asset custodian were to collapse. 

Additionally, Senator Lummis highlighted her efforts to bring more clarity to the crypto industry in Washington. She co-sponsored comprehensive crypto legislation with Senator Kirsten Gillibrand aimed at outlining regulatory frameworks for the sector. 

Lummis expressed hope that the legislation could pass in early 2024, and she remains open to incorporating specific elements into other legislative packages.

Notably, a portion of Lummis’ legislation addressing terrorist financing was recently included in the Senate’s defense spending package, the National Defense Authorization Act, demonstrating the urgency and necessity of regulatory measures in the crypto space. 

Lummis emphasized the importance of combating illicit uses of cryptocurrency, such as its alleged ties to funding terrorist activities.

Bipartisan Collaboration

Senator Lummis also expressed her support for the digital asset framework proposed by the House Financial Service Committee, led by Committee Chair Patrick McHenry. 

Lummis noted that the small differences between the House and Senate versions, particularly regarding stablecoins, are resolvable, and she is optimistic about resolving the House’s renewed commitment to addressing the issue.

Per the report, Lummis has been working closely with McHenry to advance the stablecoin component of her bill. Lummis believes they can reconcile minor differences and introduce legislation before the end of the year. The senator emphasized the urgent need for a clear regulatory framework in the industry to foster innovation and protect investors.

As regulation remains a contentious topic, Senator Lummis’ pro-crypto stance, along with her collaboration with other lawmakers, aims to strike a balance between oversight and fostering a favorable environment for the industry. 

With growing concerns about the lack of regulatory clarity, the crypto community awaits developments in Washington that could shape the future of the rapidly evolving sector.

Featured image from Shutterstock, chart from TradingView.com