Senator Lummis Slams SEC, Predicts Big Crypto Changes in 2024

Wyoming Senator Cynthia Lummis has taken aim at the US Securities and Exchange Commission (SEC), criticizing its chair, Gary Gensler, for his handling of crypto regulations. Speaking on CNBC’sSquawk Box, she emphasized the need for clearer laws to govern the crypto space, suggesting that Congress should step up instead of relying solely on the SEC’s enforcement actions.

Lummis praised the European Union's approach to crypto regulation, warning that the US risks falling behind in financial innovation if it continues with its current strategy. According to her, a lack of regulatory clarity is pushing companies to look elsewhere, which could weaken the US's position in the global financial market.

She hinted that Gensler’s tenure as SEC chair might end in 2024, particularly if Vice President Kamala Harris wins the next presidential election. While Gensler reportedly “loves the job,” his future in the role is uncertain as criticism over his regulatory stance grows.

The core issue for Lummis is Gensler’s stance on classifying Bitcoin (BTC) and Ethereum (ETH). She believes these digital assets should be recognized as commodities rather than securities. The Senator also argued that other cryptocurrencies could be classified as commodities under the jurisdiction of the Commodity Futures Trading Commission (CFTC).

Lummis stressed the need for updating regulatory frameworks, such as the Howey Test, to define which digital assets fall under which regulatory body. “It’s not the asset itself that can be fraudulent; it’s the misuse of that asset,” she explained, calling for more precise definitions.

The Senator has also expressed disapproval of the SEC’s “regulation by enforcement” strategy. This approach has led to a wave of lawsuits and penalties, which she views as an ineffective way to govern the industry. Instead, she argues that clear rules would provide certainty to businesses and consumers alike.

In her view, Congress should take responsibility for setting crypto regulations, rather than leaving the SEC to decide. Lummis is collaborating with Senator Kirsten Gillibrand on a bipartisan bill aimed at establishing clearer guidelines for digital assets. The goal is to give the crypto industry a rulebook, reducing confusion and regulatory uncertainty.

Lummis isn’t alone in this criticism. Over 40 Congress members have also called on the SEC to allow banks to offer crypto custody services, highlighting growing discontent within the government over the SEC’s rigid stance.

As the 2024 elections approach, Gensler’s role is under increasing scrutiny. Former President Donald Trump has vowed to remove him if elected, while Kamala Harris, currently a frontrunner, might consider appointing him as Treasury Secretary if she wins. This uncertainty has left the SEC’s future direction in question.

In summary, Lummis sees the need for Congressional action to establish a more effective regulatory framework. If this doesn’t happen, she warns, the US could see a shift in its standing in the global financial system, especially as other regions like the EU are making strides in crypto regulation.