Key Republican lawmakers say they want clarity from the U.S. Securities and Exchange Commission on how it views airdrops in the cryptocurrency industry.
House Financial Services Committee Chairman Patrick McHenry, D-North Carolina, and House Majority Whip Tom Emmer, D-Minn., accused the SEC of “putting its thumb on the scale” in a letter to Commission Chairman Gary Gensler on Tuesday.
“By making claims about airdrops in a variety of instances and increasing warnings of further enforcement action, the SEC is creating a hostile regulatory environment that is amplifying the scale and preventing Americans from shaping the next generation of the internet,” they wrote.
Some cryptocurrency startups use airdrops to distribute free tokens to digital asset wallets.
The lawmakers cited examples of the SEC’s handling of airdrops. example This is about Tron founder Justin Sun. The agency said the airdrop could be considered a “sale or distribution of securities.” footnote In their 2019 “Framework for Analyzing ‘Investment Contracts’ in Digital Assets,” Emmer and McHenry said developers “should have blocked Americans from receiving cryptocurrencies in airdrops.”
“By prohibiting Americans from participating in airdrops, the SEC is preventing cryptocurrency users from fully realizing the benefits of blockchain technology,” Emmer and McHenry wrote.
The two sent Gensler a series of questions, including how the agency plans to distinguish between airline miles or credit card points and airdrops. They said they wanted to hear from Gensler by Sept. 30. The SEC did not immediately respond to a request for comment.
McHenry and Emmer have been critical of Gensler’s approach to cryptocurrency regulation for years. Gensler has argued that most cryptocurrencies are securities and has urged cryptocurrency platforms to register with the agency. Meanwhile, McHenry and Emmer Pass through The House passed the Cryptocurrency Market Structure Act, decentralizing jurisdiction over cryptocurrencies to the SEC and giving new jurisdiction to the Commodity Futures Trading Commission.
The letter comes as the House Financial Services Committee plans to hold several hearings next week to focus on the SEC and cryptocurrencies. Lawmakers are scheduled to hold a hearing on Wednesday. “Dazed and Confused: Analyzing the SEC’s Politicized Approach to Digital Assets” and another piece on the agency’s oversight next week, when all five commissioners Attend Hearing on September 24th.
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