Unchained Why Senator Pat Toomey Thinks SEC Chair Gary Gensler Is Wrong About Crypto - Ep. 399
Sep 23, 2022
Pat Toomey, U.S. Senator for Pennsylvania, dives deep into the world of crypto regulation. He argues against the SEC's 'regulation by enforcement' approach and emphasizes the need for clarity regarding what defines a security. Toomey discusses the implications of proof of stake models and advocates for a balanced framework for stablecoins, steering clear of outright bans on algorithmic versions. He highlights the lessons learned from crypto collapses and critiques existing government reports on digital currencies, expressing concerns about innovation flight from the U.S.
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Crypto vs. Securities
- Crypto tokens differ structurally from securities, lacking direct issuer claims or built-in returns.
- They are often decentralized, unlike centralized securities, requiring distinct regulations.
Decentralization’s Importance
- Decentralization is key in determining security status, but defining sufficient decentralization is complex.
- A separate regulatory regime for crypto might be more practical than applying securities laws.
Regulation by Enforcement
- The SEC's "regulation by enforcement" lacks transparency and clarity for the crypto industry.
- This approach creates uncertainty, making it difficult for projects to determine their regulatory compliance.
