Senator Cynthia Lummis Slams SEC for its “Ruling by Enforcement” Approach Following Kraken Lawsuit

cryptonews.com:

Senator Cynthia Lummis has criticized the Securities and Exchange Commission (SEC) for its current approach to cryptocurrency regulation.

In a recent post on X (formerly Twitter), the senator accused the agency of relying on a “ruling by enforcement” strategy, highlighting that crypto asset companies seeking guidance from the SEC often face enforcement actions that lack clear justification and ultimately harm consumers.

“The SEC cannot continue ruling by enforcement. Crypto asset companies have repeatedly tried to get guidance from the SEC only to be hit with enforcement actions, causing unnecessary harm to consumers,” she said. 

Lummis added that it is Congress’s responsibility to develop a comprehensive regulatory framework that provides clarity on what constitutes a security and what qualifies as a commodity in the crypto industry.

The SEC cannot continue ruling by enforcement. My statement on the Kraken lawsuit below: pic.twitter.com/J3qhzU624N

— Senator Cynthia Lummis (@SenLummis) November 21, 2023

Lummis’s remarks come in the wake of a recent lawsuit filed by the SEC against popular cryptocurrency exchange Kraken. 

The federal regulator alleged that Kraken operated as an unregistered broker, clearing agency, and dealer while commingling customer and corporate funds. 

According to the SEC, this violated federal securities laws and created significant risks for customers, with up to $33 billion in customer crypto assets mixed with the exchange’s own corporate assets.

“Similarly, Kraken has held at times more than $5 billion worth of its customers’ cash, and it also commingles some of its customers’ cash with some of its own,” the suit said. 

“In fact, Kraken has at times paid operational expenses directly from