In a letter sent to SEC Chairman Gary Gensler on Thursday, Sen. John Hickenlooper, D-Colo., called on the Securities and Exchanges Commission to take more initiative in regulating cryptocurrencies.
"Whatever the risks and benefits of these new assets might be, existing laws and regulations were not designed to deal with how digital assets are being used in the market," Mr. Hickenlooper wrote in his letter to Mr. Gensler. "Currently, digital asset markets do not have a coordinated regulatory framework. This creates uneven enforcement, and deprives investors of a clear understanding of how they are protected from fraud, manipulation, and abuse."
Mr. Hickenlooper specifically asked for the SEC to regulate digital asset securities "through a transparent notice-and-comment regulatory process."
Other lawmakers on Capitol Hill have introduced legislation to address crypto regulation, but the industry still lacks clarity in defining a digital commodity vs. a digital security. This has led to further confusion about when crypto should be regulated by the SEC and when it should be regulated by the Commodity Futures Trading Commission.
In his letter, Mr. Hickenlooper requested that the SEC clarify what types of digital assets are securities; address how to issue and list digital securities; decide what disclosures investors need to stay informed; establish a registration regime for digital security trading platforms; and create rules on how to carry out the trading and custody of digital assets.
"Given the complexity of these issues, and recognizing that some digital assets are securities, others may be commodities, and others may subject to a completely different regulatory regime, a formal regulatory process is needed now," Mr. Hickenlooper wrote.