US Senator Pat Tomey has called out the Securities and Exchange Commission over their role in the build-up to investors losing funds deposited on Celsius. The crypto lending platform announced some weeks ago that it was suspending withdrawals, holding on to investors’ funds. Tomey believes that the SEC could have been proactive by helping users protect about $12 billion in diverse digital assets sent to the lending platform.
US Senator charges SEC with helping investors
According to the letter addressed by the US Senator to SEC boss Gary Gensler, he mentioned that the body has repeatedly failed to clarify the application of specific laws. In the letter, Tomey mentioned that investors are now seeing the repercussion of the SEC’s failure to pinpoint how it would apply already laid down laws guarding securities to digital assets. He said that if this had been done, companies would have made important changes that would help safeguard investors from losses.
The US Senator also said that this would have removed all the burden of investigating such companies, allowing the agency to move after malicious entities in the market. In his letter, Tomey stressed that the SEC didn’t note how it would apply the Howey and Reves test to lending platforms like Celsius. Instead, the SEC is carefully choosing which platform to go after.
Tomey wants regulatory clarity
Pat Tomey also noted the recent case of an employee at high-flying crypto exchange Coinbase accused of insider trading. He said that the SEC was aware that the assets in question were securities but failed to note that to the general public before launching an investigation into the case. The US Senator also mentioned the assumption that most digital assets are securities stating that the agency is making it hard for companies to follow these rules.
He also said that the SEC has not lived up to its expectations regarding helping users evade losses due to its stylish enforcement of the law. With this, Tomey feels that the SEC dragging its feet regarding clarity of regulations would continue to put investors’ funds at risk on exchanges. In his final note, he asked the SEC to pinpoint lending platforms that are yet to be fully registered under them. He also asked that the agency explain why the commission has refused to add more than 10 assets traded by Coinbase employees into its charges.