US Senator Cynthia Lummis Calls for Urgent Crypto Regulation, Criticizes SEC

• US Senator calls for cryptocurrency regulation
• Lummis criticizes SEC's approach under previous leadership
• Legislative proposals seek clarity between securities and commodities

US Senator Cynthia Lummis, known for her support of cryptocurrencies, recently emphasized the importance of clear regulation for the sector in the United States. In um In a statement, Lummis said the approach taken by the U.S. Securities and Exchange Commission (SEC) during the previous administration was “un-American” and that it is Congress’ responsibility to provide a legislative framework that clearly differentiates between a security and a commodity.

Lummis filed a 29-page amicus brief with the U.S. Court of Appeals for the Second Circuit in the SEC’s case against Coinbase, in which the agency accused the exchange of operating without proper registration. She criticized the SEC for aggressively reinterpreting case law related to the Howey test and investment contracts, keeping those interpretations secret and requiring compliance from digital asset exchanges.

In addition to her role in the Senate, Lummis was recently appointed as chair of a subcommittee of the Banking Committee focused on digital assets. She has been working on bills to regulate the cryptocurrency market, including a proposal with Senator Kirsten Gillibrand that aims to clarify the role of the SEC and require digital asset exchanges to register with the U.S. Commodity Futures Trading Commission.

NEW: US Senator Cynthia Lummis receives framed portrait of President Trump in a Bitcoin block 🇺🇸 pic.twitter.com/sCzKmiQSPQ

- Bitcoin Magazine (@BitcoinMagazine) January 28, 2025

The question of whether certain cryptocurrencies are securities has been at the center of legal action in recent years. Under previous leadership, the SEC took the position that most cryptocurrencies are securities and required crypto platforms to register. That has sparked resistance from some in the industry, who argue that registering with the agency is impossible because of rules designed for more traditional entities, unlike the digital asset industry.

The digital asset dream team. Let's get to work🇺🇸 @SenThomTillis @SenatorHagerty @SenMcCormickPA @BernieMoreno @SenRubenGallego @SenTinaSmith @MarkWarner @ChrisVanHollen pic.twitter.com/BIUb3U7TTB

—Senator Cynthia Lummis (@SenLummis) January 27, 2025

With the change in administration, the SEC’s stance on cryptocurrencies is expected to change, especially after the appointment of former crypto-friendly regulator Paul Atkins to lead the agency. Republican SEC commissioners have already begun taking steps to change the agency’s direction regarding cryptocurrencies. Acting Chairman Mark Uyeda recently announced the creation of a cryptocurrency task force to “put the SEC on a sensible regulatory path.”

Meanwhile, financial industry leaders such as BlackRock CEO Larry Fink have been advocating for the tokenization of bonds and stocks to democratize investing and facilitate cryptocurrency adoption. Fink suggested that if the rules allow, the banking system will quickly adopt cryptocurrencies on the transaction side.

The Coinbase case presents an opportunity to clarify the SEC’s authority over cryptocurrencies. Lummis argues that Congress is better equipped than the SEC to craft a regulatory framework that considers the interests of the federal government, digital asset consumers and the industry itself.

With lawsuits pending across the country that hinge on the SEC’s overzealous interpretation of the securities laws, it is vital that the Second Circuit speak out now and stop the SEC’s violation of the separation of powers and encroachment on Congress’s legislative powers.

Senator Lummis continues to lead efforts to establish clear and comprehensive regulation for the cryptocurrency market in the United States, seeking to balance consumer protection with fostering innovation in the financial sector.