Senator Cynthia Lummis Blasts SEC Following Kraken Lawsuit, Says Regulator Cannot Rule by Enforcement

The U.S. Securities and Exchange Commission (SEC) has slapped the crypto exchange Kraken with new charges, and Wyoming Senator Cynthia Lummis isn’t happy about it.

The SEC charged Kraken this week with operating its crypto trading platform as an unregistered securities exchange, broker, dealer and clearing agency.

The regulator alleges the San Francisco-based exchange has made hundreds of millions of dollars “unlawfully facilitating the buying and selling of crypto asset securities.”

Gurbir S. Grewal, director of the SEC’s Division of Enforcement, says in a press release that Kraken chose profits over investor protection.

“We allege that Kraken made a business decision to reap hundreds of millions of dollars from investors rather than coming into compliance with the securities laws. That decision resulted in a business model rife with conflicts of interest that placed investors’ funds at risk.”

Lummis (R-Wyoming), however, says the SEC’s action is another example of “ruling by enforcement.”

“Crypto asset companies have repeatedly tried to get guidance from the SEC only to be hit with enforcement actions, causing unnecessary harm to consumers. It is time for Congress to pass a regulatory framework to provide clear rules to the SEC on what is a security and what is a commodity. The Lummis-Gillibrand Responsible Financial Innovation Act will rein in the SEC and allow financial innovation to thrive in the United States.”

Lummis, a noted crypto supporter, has previously said she wants a federal digital asset regulation bill to pass in the US early next year.

Earlier this year, Kraken, facing different charges from the SEC, agreed to stop its staking services and pay a civil penalty of $30 million.

Kraken co-founder Jesse Powell says the regulator is now “back for seconds.”

“Message is clear: $30 million buys you about 10 months before the SEC comes around to extort you again. Lawyers can do a lot with $30 million, but the SEC knows that a real fight will likely cost $100 million+ and valuable time. If you can’t afford it, get your crypto company out of the US warzone.”

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