Senator Cynthia Lummis states that the SEC “cannot continue to rule by enforcement” in the wake of the Kraken lawsuit
Tuesday, Republican Senator Cynthia Lummis of Wyoming blasted the SEC for its present stance on cryptocurrency regulation, saying that the regulator often used “ruling by enforcement” to keep prices down.
In an X (formerly Twitter) post, Lummis voiced her disagreement, saying that the SEC’s enforcement measures against crypto asset businesses that seek assistance are harmful to consumers and lack a clear foundation.
“Enforcing rulings is not going to work for the SEC anymore. Lummis made the statement that crypto asset businesses have been subjected to enforcement proceedings despite their repeated requests for direction from the SEC, which has resulted in needless damage to consumers. An explanation of the difference between a security and a commodity should be laid forth by Congress, in her opinion.
Kraken, a cryptocurrency exchange, is facing legal action from the SEC over allegations of mixing client and company assets. According to the lawsuit, Kraken breached federal securities laws while acting as a dealer, clearing agency, and broker without proper registration.
The SEC claims that Kraken’s behavior has exposed its clients to “significant risk” as the company has mixed up its own money with customer crypto assets worth up to $33 billion. According to the federal authority, this information was supported by a declaration from Kraken’s independent auditor.