Senator Pat Toomey of Pennsylvania said that China’s authoritarian crackdown on crypto should be taken as an advantage by the US. 

To seize the opportunity, the US regulators need to change their “regulation-by-enforcement” ways, according to the Banking Committee Ranking Member, Toomey, who recently pressured the Securities and Exchange Commission (SEC) Chairman Gary Gensler to provide clear public guidance surrounding current crypto regulation, including stablecoins.

A “big opportunity” for the US

“China’s authoritarian crackdown on crypto, including Bitcoin, is a big opportunity for the U.S. It’s also a reminder of our huge structural advantage over China,” Toomey said on Twitter.

China’s authoritarian crackdown on crypto, including #Bitcoin, is a big opportunity for the U.S. It’s also a reminder of our huge structural advantage over China.

— Senator Pat Toomey (@SenToomey) September 24, 2021

“Economic liberty leads to faster growth, and ultimately, a higher standard of living for all,” he argued, while he pointed out that China’s hostility towards economic freedom slams the door shut for “what is arguably the most exciting innovation in finance in decades.” 

Toomey has recently raised the alarm about the lack of transparency and objectivity surrounding the current state of crypto regulation in the country, insisting that the SEC lays out clear guidelines on what cryptocurrencies they view as securities. 

Chairman @GaryGensler and the SEC must lay out clear guidelines on what cryptocurrencies they view as securities. Regulation by enforcement is extremely objectionable and will kill domestic innovation.

Watch my full interview with @SquawkCNBC. pic.twitter.com/DLqIFT3SGh

— Senator Pat Toomey (@SenToomey) September 15, 2021

List of questions

As the latest chapter of Beijing’s war on crypto unfolds, Toomey, who believes that the US should take advantage of the momentum, continues underscoring that “regulation by enforcement is extremely objectionable and will kill domestic innovation.” 

In a recent letter to SEC Chairman Gensler, Senator requested “detailed answers” to a list of questions, submitted to provide both Congress and industry insiders clarity on the current regulation of cryptocurrencies.

“For investors to benefit from a fair and competitive marketplace, regulators must proactively provide rules of the road to industry. Unfortunately, the SEC has instead adopted a strategy of regulation-by-enforcement in this area,” read the letter, which came as a follow up to Gensler’s testimony before the Senate Banking Committee on September 14.

Toomey’s concerns about the SEC’s lack of regulatory clarity are shared by others, including SEC Commissioners Hester Peirce and Elad Roisman.

“Please provide detailed answers so that innovators have the guidance they need to ensure domestic investment and innovation in these technologies,” Toomey asked Gensler, urging him, before anything else, to “identify the specific characteristics that distinguish a cryptocurrency that is a security from one that has been deemed a commodity.”

Amongst others, Toomey also asked Gensler to elaborate on “the threshold for a token to be deemed decentralized” and inquired for a detailed explanation on the analysis applied for stablecoin classification. 

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