Investors in crypto loan products suffer from reluctance SEC Pat Toomey, Vice Chairman of the US Senate Banking Committee, said to clarify the regulation of the digital asset industry.

In a letter to SEC chairman Gary Gensler, the politician stressed that the agency’s “regulation by enforcement” approach is a rebellious and ineffective approach to consumer protection. Toomey said the department’s measures hampered innovation and contributed to investors’ financial losses.

He recalled that in recent weeks, several companies offering crypto loan services, which are probably the responsibility of the SEC, have gone bankrupt.

“These firms often promise huge, seemingly unsustainable interest rates to their depositors, and at least one of them allegedly engages in risky practices. Celsius, one of these businesses, reportedly manages nearly $12 billion in assets, using funds from thousands of Americans to provide loans to short-term crypto investors.

The politician said Celsius clients’ funds have been frozen since mid-June and the integrity of their deposits is questionable.

“Things could have been different if the SEC had responded to calls for clarity on how to apply existing securities laws to new digital assets and services,” Toomey said.

In this case, companies can adjust products accordingly and avoid the loss of investors, he is sure.

“Instead, the SEC chooses to enforce regulation by selectively enforcing its opaque stance that digital assets and services are securities,” the senator said.

He cited insider trading charges brought by the commission against a former employee of the Coinbase exchange and two accomplices. In this case, the SEC allegedly has a clear idea of ​​why it considers the nine digital assets in the claim as securities, but has not made its opinion public. Toomey also noted that at least 25 tokens were listed in the charges brought against the defendants by the Justice Department.

He asked Gensler to provide written answers to a series of questions about interactions with Celsius, Voyager, and BlockFi, possible recommendations for their products, and some other aspects of dealings with the industry.

Toomey also learned about the “distinguishing features” of nine tokens from the SEC lawsuit against a former Coinbase employee and 16 other entities.

Earlier CFTC He noted the SEC’s opaque approach to classifying tokens as “digital securities” in this case, and criticized the regulatory agency’s approach to enforcement.

Recall that in the US Congress the Commission was accused of politicizing the rules and “unethical attitude” towards the crypto industry.

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