US: Republicans defend crypto airdrops against hostile SEC

In the crypto universe, airdrops have become essential, but the Securities and Exchange Commission (SEC) does not see this shower of tokens in a good light. For it, these free distributions are disguised sales. Faced with this offensive, two influential members of the American Congress, Patrick McHenry and Tom Emmer, are demanding clear answers from the SEC on the distinction between airdrops and loyalty programs.

The SEC, at the center of tensions with elected officials

Patrick McHenry, chairman of the House Financial Services Committee and author of a call for the United States to take the reins of bitcoin, and Tom Emmer, the House majority whip, are not mincing their words. a scathing letter addressed to Gary Gensler, chairman of the SEC, they accuse him of “ to distort the balance » by establishing a regulatory climate hostile to crypto airdrops.

These token largesse, considered as ” disguised sales of securities “, have become the SEC's bête noire, particularly with the Justin Sun case of TRON. Even though the latter had been authorized to strengthen his defense last year.

For these elected officials, the SEC goes too far in calling airdrops a distribution of securitiesThey even cite concrete examples to support their words:

• The case of TRON (TRX) and Justin Sun in 2019;
• SEC's Growing Warnings of Future Legal Actions;
• Pressure on crypto startups to exclude Americans from these operations.

In their letter, McHenry and Emmer ask the SEC to clarify its position before the end of the monthparticularly on the difference between airdrops and simple loyalty programs like credit card points or airline miles.

A regulatory war that shakes crypto

The battlefield is clearly defined: on one side, an uncompromising SEC ; on the other hand,Pro-crypto lawmakers seek to redefine the landscape. According to them, by excluding Americans from airdrops, the SEC is depriving crypto users of the full benefit of blockchain technologies.

But that's not all, McHenry and Emmer prepare bill to better structure crypto market.

This initiative aims to redefine the jurisdiction between the SEC and the Commodity Futures Trading Commission (CFTC), to Preventing the SEC from stifling innovation. McHenry and Emmer criticize Gensler for treating most cryptocurrencies as securities, which would force crypto exchanges, such as embattled Kraken, to comply with the financial watchdog's demands.

The next round will take place in congressional hearings, where the SEC will be scrutinized.

As the SEC ramps up its crackdown on these practices, there are calls to reinvent crypto airdrops. Vitalik Buterin recently proposed integrating blockchain identity for more fairness.