SEC vs Yellen? Ripple lawyer questions encryption rules

Discussions took place on cryptocurrency regulation. new turn Stuart Alderoty, Ripple’s top lawyer, took to Twitter to highlight contradictory statements from the Securities and Exchange Commission (SEC) and Treasury Secretary Janet Yellen.

In a recent court case involving Coinbase, the SEC referred to the cryptocurrency market as a “rounding error” in the grand scheme of global capital markets and asserted authority over the sector.

Yellen, by contrast, called on Congress a day earlier for new legislation to address regulatory gaps in the cryptocurrency space.

Yellen calls for urgent cryptocurrency regulation

Against the backdrop of the collapse of the FTX exchange and increasing vulnerabilities in the digital asset sector, Treasury Secretary Janet Yellen called on Congress to quickly enact new legislation to regulate the cryptocurrency market.

As U.Today reported, Yellen pointed out significant regulatory gaps, particularly emphasizing the need for an explicit legal framework to govern spot markets for digital assets not classified as securities.

The proposed Financial Innovation and Technology Act is one legislative effort to give federal regulators clear oversight of digital asset markets and strengthen customer protections and market integrity.

Coinbase Challenges SEC

In Manhattan federal court, Coinbase and the SEC engaged in a legal battle that could set a precedent for digital asset classification. At the heart of the debate is whether cryptocurrencies such as Solana, Cardano, and Polygon, which are traded on Coinbase and considered investment contracts by the SEC, should be registered as securities.

Coinbase disputes this notion, arguing that cryptocurrency assets do not fit the traditional definition of an investment contract.

The SEC’s lawsuit extends beyond token offerings to target the exchange’s ‘staking’ program, which it claims should be registered.