Written by Hazel J. Greene, Senior Analyst

Following the recent legal victory by Ripple, a digital payment network, Representative Ritchie Torres has written a letter to the US Securities and Exchange Commission (SEC), urging them to reconsider their approach to regulating cryptocurrencies.

Representative Ritchie Torres highlights the recent decision by Judge Analisa Torres in the Ripple case, which dismissed the SEC’s argument that programmatic sales of XRP should be classified as securities. In his letter to SEC Chair Gary Gensler, Rep. Torres asserts that the SEC’s approach to regulating cryptocurrencies has been discriminatory and lacks a strong legal basis.

Torres praises Judge Torres’ ruling, emphasizing the need to prove the presence of an “investment contract” and heralding it as a return to a more rigorous application of the Howey Test. He suggests that the ruling should be named the “Torres Doctrine,” which posits that crypto assets are not securities in themselves but may be sold as part of investment contracts.

The letter also criticizes the SEC for its failure to provide clear guidance and fair notice to the crypto industry. Rep. Torres points out that under Chair Gensler’s leadership, the SEC has not issued any specific rules on crypto assets, causing confusion among market participants.

Rep. Torres urges the SEC to focus its enforcement efforts on genuinely malicious actors who engage in fraud, market manipulation, and misappropriation of customer funds. By doing so, he believes the SEC can better protect investors and foster a more conducive regulatory environment.

This letter from Rep. Torres is a significant development in the ongoing debate over crypto regulation. It adds to the growing number of voices calling for a more balanced and nuanced approach to regulating this rapidly evolving industry.

The expectation now is to see how the SEC will respond to Rep. Torres’ letter. While the outcome remains uncertain, there is a noticeable shift in momentum towards a more sensible and pragmatic approach to crypto regulation. This indicates a potential turning point in the ongoing battle between Congress and the SEC.

Following Judge Torres’ decision in the Ripple case, XRP experienced a sudden surge, briefly surpassing the $0.900 level. However, in recent days, XRP’s price has remained relatively stable, trading within a range of $0.745 to $0.760. At the time of writing, XRP is trading at $0.750, showing a modest gain of over 3% in the last 24 hours.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.