Following the legal victory by the digital payment network, Ripple, Representative Ritchie Torres has written a letter to the US Securities and Exchange Commission (SEC) urging them to reconsider their approach to regulating cryptocurrencies.
The letter, addressed to SEC Chair Gary Gensler, highlights the recent decision by Judge Analisa Torres of the Southern District of New York in the Ripple case, which rejected the SEC’s argument that programmatic sales of XRP constitute securities sales.
Ripple’s Legal Win Sparks New Battle Between Congress And SEC
Rep. Torres argues that the SEC’s “crusade against crypto assets” has been discriminatory and lacks legal basis. He praises Judge Torres’ ruling, which emphasizes the need to prove the presence of an “investment contract” and represents a return to a rigorous application of the Howey Test. Torres added:
In a landmark legal opinion, Judge Torres resoundingly rejected the regulatory overreach of the SEC, which has been discriminately declaring all crypto assets, except Bitcoin, to be securities. By emphasizing the need to prove the presence of an investment contract, Judge Torres’s reasoning represents a return to a rigorous application of the Howey Test, which has been applied sloppily by the SEC.
He goes on to suggest that the ruling should be named the “Torres Doctrine,” which holds that crypto assets are not securities in themselves but can be sold as part of investment contracts.
The letter also criticizes the SEC for failing to provide fair notice to the crypto industry. Under Chair Gensler, the SEC has not issued a single rule on crypto assets, nor has it given any clear guidance. Rep. Torres argues that the SEC’s mixed messages and arbitrary enforcement actions have created confusion and violated the principle of fair notice.
Rep. Torres concludes the letter by calling on the SEC to concentrate its enforcement energies on “bonafide bad actors” who perpetrate serious transgressions like fraud, market manipulation, and the misappropriation of customer funds.
I look forward to finding out how the SEC will reassess its regulatory assault on crypto assets in light of the Torres Doctrine
The letter is a significant development in the ongoing debate over how to regulate cryptocurrencies. It adds to the growing chorus of voices calling for a more balanced and nuanced approach to regulating this rapidly evolving industry.
It remains to be seen how the SEC will respond to Rep. Torres’ letter, but it is clear that the momentum is shifting in favor of a more sensible and pragmatic approach to crypto regulation.
At present, XRP’s price has remained relatively unchanged since the sudden surge following Judge Torres’ decision last week on the Ripple case, which pushed the token above the $0.900 level.
XRP has been trading within a range of $0.745 to $0.760, with little volatility in recent days. As of now, XRP is trading at $0.750, showing a modest gain of over 3% in the last 24 hours.
Featured image from Unsplash, chart from TradingView.com.