Congressman Torres takes aim at SEC’s crypto oversight, calls for investigation

TL;DR Breakdown

  • New York’s Congressman Ritchie Torres has called for an investigation into the SEC for its “haphazard and heavy-handed approach to digital assets.”
  • Torress calls into question the politics behind the registration process approval for Prometheum, a special-purpose broker-dealer license.
  • The Congressman asks SEC Inspector General Deborah Jeffrey to look into the  “unusual backroom deal” that resulted in Prometheum being awarded a power that no other crypto exchange has yet obtained. 
  • 6 Republican senators sent a letter to the DoJ and the SEC, asking the agencies to look into Prometheum’s alleged ties with China.

Description

According to two letters made public on Thursday, Congressman Ritchie Torres has asked for two separate independent investigations into the United States Securities and Exchange Commission (SEC) for its “haphazard and heavy-handed approach to digital assets.” The representative accuses Gensler of “politicizing” the registration process by approving Prometheum’s special purpose broker-dealer license. New York Congressman … Read more

According to two letters made public on Thursday, Congressman Ritchie Torres has asked for two separate independent investigations into the United States Securities and Exchange Commission (SEC) for its “haphazard and heavy-handed approach to digital assets.” The representative accuses Gensler of “politicizing” the registration process by approving Prometheum’s special purpose broker-dealer license.

New York Congressman Torres goes after SEC

According to reports, Rep Torres (D-NY) has requested an investigation into the SEC’s unusual decision to grant a special purpose broker-dealer (SPBD) license to Prometheum, “a trading digital assets platform that does not trade digital assets.” Additionally, Torres has asked for an investigation into SEC for its failure to create a rigorous but workable process for registering actual digital assets platforms.

The dubious decision to licence a deceptive digital assets platform reflects the latest attempt by Chair Gary Gensler to politicize the registration process to an extent seldom seen in the SEC’s history […] When it comes to trading platforms that operate in the real world, the SEC’s path to registration remains a bridge to nowhere.

Ritchie Torres

In a letter to SEC Inspector General Deborah Jeffrey, Torres asked that the SEC investigate the “unusual backroom deal” that resulted in Prometheum being awarded a power that no other crypto exchange has yet obtained. 

Prometheum appears to be nothing more than a Potemkin platform, operating as a timely talking point for crypto critics rather than a true trading platform for crypto customers.

Ritchie Torres

SEC accused of crypto politics

Torres claimed that by approving Prometheum’s SPBD license, the SEC is once again acting arbitrarily in its approach to crypto regulation. SEC crypto regulation has once more come into the spotlight after XRP won the case against the institution yesterday.

Torres referred to the SEC as “an overzealous traffic agent who arbitrarily tickets drivers for speeding while keeping everyone endlessly guessing about the speeding limit,” adding that regulation by enforcement is not an effective method of regulation.

The letter comes one day after Blockchain Association, a crypto advocacy organization, sent a similar letter to Jeffrey regarding Prometheum. The Blockchain Association asserts that Prometheum received a contract from the SEC in exchange for altering its public discourse about the agency from negative to positive. 

We are concerned that Chair Gensler is using Prometheum and the SPBD licensure process as a means to thwart congressional efforts toward legislation by continuing to spread the false narrative that the law is already clear with regard to digital asset securities. 

Blockchain Association

Torres’ criticism of the SEC and its SPBD authorization procedure coincides with public rage on the part of his Republican colleagues. 

Six Republican senators wrote to the Department of Justice and the Securities and Exchange Commission on Monday, requesting that the authorities investigate Prometheum’s suspected ties to China. The group also says that Prometheum CEO Aaron Kaplan may have violated securities laws and given fraudulent testimony to senators on Capitol Hill last month. 

In recent weeks, the issuance of Prometheum’s license has become a lightning rod in the crypto industry, with the SEC and Prometheum’s co-CEO Aaron Kaplan arguing that this proves that no new regulations or laws are required for digital assets such as bitcoin, ether, and thousands of other tokens. 

In addition, it happens at a time when Congress is debating multiple measures that seek to clarify the regulatory landscape for the digital assets industry.

On June 11, Kaplan testified to this effect before the House Financial Services Committee during a hearing on a digital asset market structure bill. This placed him at odds with the other witnesses and, coupled with the relatively low profile of his company, raised questions about whether the SEC had arranged for him to be on the witness list. 

Kaplan stated that he appeared at the request of Maxine Waters (D-Michigan), the ranking minority member. Despite all of this rage, no actual evidence of misconduct has been provided, and there may never be. 

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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