Senator Lummis Criticizes SEC’s Crypto Regulations, Calls for Clearer Guidelines

• Senator Lummis argues SEC regulations are unclear, creating uncertainty for digital asset companies.
• Lummis calls for Congress to clarify agency roles and proposes the CFTC should oversee Bitcoin and Ethereum.
• Lawmakers urge the SEC to withdraw its crypto regulations, citing undue burdens on crypto custodians.

Senator Cynthia Lummis has voiced strong criticism of the U.S. Securities and Exchange Commission’s (SEC) handling of cryptocurrency regulations, particularly the approach taken by SEC Chair Gary Gensler. 

During a recent interview on CNBC’s Squawk Box, Lummis expressed concern that Gensler’s enforcement-driven tactics harm the crypto industry by creating uncertainty and stifling innovation.

Lummis highlighted that instead of providing clear regulatory guidelines, the SEC has relied on enforcement actions, which she believes has led to a series of legal disputes involving digital asset companies. This, she argues, has created an environment of confusion, preventing the sector from developing under a consistent and transparent framework. 

Lummis highlighted that BTC or ETH as well as other tokens should be classified as commodities under CFTC and not as securities under SEC. She said that SEC’s current approach does not fit decentralized coins, which creates more problems for those operating in the industry.

Additionally, the Wyoming Senator pointed out that the U.S. lags behind the European Union, which passed comprehensive cryptocurrency regulations in 2023. According to Lummis, the U.S. risks losing its competitive edge in global financial services if regulatory gaps are not addressed swiftly.

Lummis has called for changes to the wash sale rules alongside Senator Kirsten Gillibrand to increase provisions for the CFTC’s funding as well as improve its authority over digital assets. This legislative initiative is among other initiatives that seek to provide a clear and up to date legal framework of the digital currency.

Besides, Lummis urged the US Senators to reject the SEC Staff Accounting Bulletin No. 121 (SAB 121) dealing with the classification of customer assets by crypto custodians as liabilities. Some legislators have criticised the fact that those rules create too many burdensome requirements and they demanded the removal of the bulletin.