By Michael Scott
Congressman Torres opines it is time for the Securities and Exchange Commission (SEC) to become content with the ‘Torres Doctrine.’
Ritchie Torres, a New York Democrat, has intensified his criticism of the U.S. SEC after it failed to provide ‘vivid direction’ to the crypto industry. This follows the agency’s loss of its legal battle with Ripple Labs from several perspectives.
Torres’ Letter Disapproves SEC Approach to Crypto Industry
Via an open letter on Tuesday to Gary Gensler, SEC Chairman, Torres revealed that regulation by enforcement was terrible in court. His framing resonates with longtime disapproval of the agency’s approach to crypto from industry leaders and fellow members of Congress.
The SEC v. Ripple Labs judge provided a summary judgment ruling claiming that XRP, the organization’s cryptocurrency, is not a security. Additionally, he claimed that token sales on secondary markets, for instance, crypto exchanges are not a security.
Ripple Ruling Inferred as Torres Doctrine
According to Torres, Judge Analissa’s judgment depicted careful application of the Howey Test. According to him, this legal standard is used for the identification of securities, which the Securities and Exchange Commission has implemented chaotically.
Judge Analissa’s judgment made it vivid to the agency that digital assets should not be securities in the abstract. The congressman also wrote that SEC has no legal authority to govern digital assets free from an actual security offering. On Monday, Gensler claimed that the judge’s ruling ‘disappointed’ him, and the commission is ‘reviewing it and analyzing the option.’
Nevertheless, Torres contended that the odds of SEC scoring an instant appeal concerning the ruling are significantly minimal. This is because some of the case’s issues will need fact-finding, which takes time.
Meanwhile, the judge’s precedent, which the congressman calls the ‘Torres Doctrine,’ will apply.
Torres argued that the fragile legal basis concerning the lawsuit against Coinbase has collapsed, which is deserved. In June, the SEC sued Coinbase and also considered other major crypto assets as securities. Examples include Polygon (MATIC), Cardano (ADA), and Solana (SOL).
The congressman concluded that he was eager to establish how the SEC will reevaluate its regulatory attack on crypto assets amid the Torres doctrine. Despite Decrypt requesting a comment, Torres failed to provide one.
Comptroller General Questions Prometheum Approval
The letter by Torres comes after similar criticism on Thursday from Inspector General Deborah Jeffrey and Comptroller General Gene Dodaro. In this case, the two advocated for the need to investigate the SEC’s ‘strange’ approval of ‘Prometheum,’ a crypto broker-dealer.
According to the politician, this approval was a sheer instance of propaganda theatre that established an impression of regulatory clearness, but, in reality, the route to registration was a link to nowhere for other organizations.