Speaking during an interview with Bloomberg Markets and Finance on September 15, the senator called out SEC chair Gary Gensler for failing to acknowledge that cryptocurrencies are different from other investment products like stocks and bonds.
He noted that Gensler should highlight the framework he uses to regulate cryptocurrencies while dismissing the SEC’s view that almost all digital assets are securities.
According to Toomey, who is also a ranking member of the Senate Banking Committee, assets like Bitcoin (BTC) differ from the rest of the market and hence cannot be classified as securities.
Congress challenge to offer crypto framework
In the absence of SEC’s regulatory framework, the lawmaker challenged Congress to take over the mandate. It is worth noting that the U.S. has a bill before Congress by Wyoming Senator Cynthia Lummis, who is seeking to provide a comprehensive guide to crypto regulations.
“The problem is that the SEC isn’t sharing with us the framework they’re using. Gary Gensler famously argues that virtually all crypto tokens are securities. I think reasonable people can disagree with that. He would exempt Bitcoin from that classification. <…> Therefore, Congress ought to step in and provide a framework. <…> In the meantime, chairman Gensler owes us much more clarity on how and why he intends to apply SEC regulations,” Toomey said.
The lawmaker stressed that the SEC should offer clear custody and clearance guidelines, considering that cryptocurrencies are a new form of investment that needs a different approach.
“I think crypto is sufficiently different. Even if you want to argue that these tokens are securities, go ahead and make the argument, but you can’t dispute that they’re very different from a stock or a bond,” he added.
Gensler facing criticism
At the same time, Gensler is still facing criticism from crypto proponents who accuse him of stippling the sector for failing to provide a regulatory benchmark.
Notably, the United States is currently working on establishing a crypto regulations framework. Still, one point of contention is selecting a suitable regulator between the SEC and Commodity Futures Trading Commission (CFTC).
However, CFTC chair Rostin Behnam has said the agency is already preparing to regulate cryptocurrencies. He noted that CFTC officials have begun working on guidelines to regulate a portion of the cryptocurrency industry.
Watch the full interview below: