Republican lawmaker and self-described crypto HODLer, Senator Cynthia Lummis, has expressed her support for the recent judgment in the SEC vs. Ripple case.
Sen. Cynthia Lummis is one of crypto’s most prominent supporters on Capitol Hill. She posted on Twitter her feelings about the ruling in the U.S. Securities and Exchange Commission’s (SEC) case against XRP.
My statement in response to the Southern District of New York’s ruling in Securities and Exchange Commission v Ripple Labs, Inc. pic.twitter.com/bmIxR0AmhT— Senator Cynthia Lummis (@SenLummis) July 14, 2023
Senator Lummis applauded Analisa Torres’ finding of the Southern District of New York (SDNY) that crypto assets traded in secondary markets are not investment contracts.
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The senator further stated that the court’s decision mirrored the position taken in the proposed crypto legislation that Sen. Kirsten Gillibrand and herself introduced in June 2022.
The proposal was called the Lummis-Gillibrand Responsible Financial Innovation Act (RFIA). It provided comprehensive regulation of digital assets and a resolution to the questions about the authority of different regulatory bodies over cryptocurrencies.
The bill also clarified how crypto assets and decentralized autonomous organizations (DAOs) are taxed and impose disclosure and consumer protection requirements on digital asset service providers.
In June, the Wyoming senator, known as the “Crypto Queen” in certain circles for her steadfast support of the crypto industry, said she was recommitting herself to working for a supportive regulatory framework for cryptocurrency.
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Critics accuse the senator of misrepresenting ruling
According to Sen. Lummis, section 501 of the RFIA echoes sentiments similar to those made in the Southern District of New York’s SEC vs. Ripple finding. Lummis believes the precedent-setting judgment is a clear sign for U.S. lawmakers to pass the RFIA finally.
“The decision confirms the need for Congress to deliver a regulatory structure for the crypto asset industry that provides the highest level of consumer protection,” the senator said in her statement.
However, several detractors have contested the senator’s interpretation of the decision, claiming that the court had not addressed the secondary sales she mentioned.
Accurately speaking, secondary sales were not ruled upon, see footnote 16. This is dictum. pic.twitter.com/VJc8lX2Z3c— Naethaan.eth | web3 lawyer (@iJonny) July 14, 2023
While Judge Torres determined that XRP is not a security since it does not automatically meet the Howey standards for an investment contract, it can be sold as a security in specific situations. However, the judge decided not to rule on all secondary XRP sales because the issue had not been adequately raised before the court.
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