The US Securities and Exchange Commission (SEC) is regularly criticized by government officials and crypto leaders for its claim on 'Digital Asset Security.' The commission recently issued a rare apology in the Binance case, admitting that its use of the term 'crypto-asset securities' caused confusion.
Terminology and Criticism
US Congressman Ritchie Torres stated that the term 'digital asset security' was invented by the Securities and Exchange Commission (SEC) out of thin air. Torres noted that this term does not appear in any law enacted by Congress and is not mentioned in any rule promulgated by the SEC, nor in any decision by the Supreme Court. The term also does not appear in the 2 million pages of the Federal Register.
SEC's Apology
The SEC retracted its use of the term 'crypto asset securities' in court documents related to the case against Binance, accompanied by an apology for causing confusion. As of September 12, the SEC no longer uses this term and regrets any confusion caused by its application to 10 tokens, including Solana, Cardano (ADA), and Polygon. The commission clarified that it is not the token itself that is considered a security, but rather the set of contracts, expectations, and agreements around its sale and distribution.
Call for Clear Regulations
Congressman Ritchie Torres had earlier urged the Commodity Futures Trading Commission (CFTC) to focus on regulating election markets following an adverse court ruling. In a letter to CFTC Chair Rostin Behnam, Torres highlighted the risks posed by less secure and unregulated exchanges operating in the election market and called for proactive regulation.
The situation surrounding the term 'digital asset security' underscores the need for clear and specific regulations in the cryptocurrency space. Lawmakers and market participants are calling for clarity from regulators to avoid misunderstandings and ensure market stability.
Comments