Rep. Ritchie Torres (D-N.Y.) raised concerns over the usage of the term “digital asset security” by the U.S. Securities and Exchange Commission (SEC,) questioning its legal basis and origin.
What Happened: During a recent congressional hearing, the Democratic Congressman asked Daniel Gallagher, former SEC commissioner, and currently the Chief Legal Officer at Robinhood, if he knew about the existence of such a term in any law enacted by the Congress or in any rule promulgated by the SEC. Gallagher responded in the negative.
“If it comes from neither statute nor rule, then where does it come from,” Torres wrote in an X post. “The SEC invented the term out of thin air.”
The hearing, entitled “Dazed and Confused: Breaking Down the SEC’s Politicized Approach to Digital Assets,” featured other market participants like Teddy Fusaro, president of Bitwise Asset Management, as witnesses.