New York Democrat Ritchie Torres stepped up his criticism of the US Securities and Exchange Commission (SEC) for issuing "no clear guidance" to the cryptocurrency industry after the agency lost its legal battle with Ripple Labs on multiple fronts.
“Enforcement regulation had a terrible day in court,” Torres wrote in a open letter to SEC Chairman Gary Gensler on Tuesday. The framing of him echoes for a long time criticism of the SEC's approach to cryptocurrency from both industry leaders and other members of Congress.
Last week, the judge overseeing SEC v. Ripple Labs issued a summary judgment ruling that the company's cryptocurrency, XRP, is not a security, nor are sales of the token on secondary markets such as cryptocurrency exchanges.
Torres said Judge Annalisa Torres' reasoning reflected a "rigorous application" of the Howey's testa legal standard for identifying securities that, in his view, the SEC has "carelessly" applied.
“Judge Torres has made it very clear to the SEC that digital assets are not securities in the abstract and that he lacks the legal authority to regulate digital assets unrelated to an actual securities offering,” the congressman wrote.
On Monday, Gensler said he was "disappointed" with the judge's ruling and that the commission is "looking at it and evaluating that option." However, Torres said the chances of the SEC getting an immediate appeal of the ruling are "extremely small" as some issues in the case will require investigation, which takes time.
Meanwhile, the precedent set by the judge, which the congressman calls the "Torres Doctrine," will prevail.
“The tenuous legal basis of the litigation against coin base It has collapsed, and rightly so," argued Torres. In its lawsuit against Coinbase in June, the SEC considered a number of other major crypto assets as securities, including Cardano (ADA), Solana (SOL), and Polygon (MATIC).
“I look forward to hearing how the SEC will reassess its regulatory assault on crypto assets in light of the Torres doctrine,” the congressman concluded. Torres did not immediately respond to Decrypt's request for comment.
Torres' letter follows a similarly critical shot by Inspector General Deborah Jeffrey and Comptroller General Gene Dodaro on Thursday, who called for an investigation into the SEC's "rare" approval of cryptocurrency brokerage "Prometheum."
The politician insisted that the approval was a mere case of propaganda theater, creating the illusion of regulatory clarity while the path to registration was, in reality, a “bridge to nowhere” for other firms.
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