In the world of cryptocurrencies, airdrops have become an integral part, but the U.S. Securities and Exchange Commission (SEC) views these distributions as disguised sales. Two influential members of Congress, Patrick McHenry and Tom Emmer, are demanding clear answers from the SEC on the distinction between airdrops and loyalty programs.
Tensions with the SEC
Patrick McHenry, chairman of the House Financial Services Committee, and Tom Emmer, majority whip in the House, sent a scathing letter to SEC Chairman Gary Gensler. They accuse him of creating a hostile regulatory environment for crypto airdrops.
Legal Battle Over Crypto Airdrops
These token giveaways, which the SEC views as disguised security sales, have become a focal point, particularly with the case against TRON and Justin Sun. The congressmen argue that the SEC is going too far by labeling airdrops as securities distributions. They cite specific cases like the TRON (TRX) matter in 2019 to support their arguments. The congressmen request the SEC to clarify its stance by the end of the month.
New Crypto Regulation Initiative
Congressmen McHenry and Emmer are preparing a bill to better structure the crypto market and redefine the jurisdiction between the SEC and the Commodity Futures Trading Commission (CFTC). This is aimed at preventing the SEC from stifling innovation, particularly in the crypto sector. The next round of this controversy will unfold during Congressional hearings, where the SEC will face scrutiny.
As the SEC intensifies its crackdown on crypto airdrops, there is a growing call to rethink and reform this area.
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