US Lawmakers Seek SEC Clarification on Airdrops

The SEC is urged to clarify its stance on airdrops. This demand is among others in a letter addressed to the agency’s head, Gary Gensler, from a group of Republican congressmen, reports The Block.

The letter was signed by the Chairman of the House Financial Services Committee, Patrick McHenry, and the House Majority Leader, Tom Emmer of Minnesota.

“By creating a hostile regulatory environment, including assertions about airdrops […] and threats of additional enforcement actions, the SEC […] deprives U.S. citizens of the opportunity to shape the next iteration of the internet,” the statement reads.

The lawmakers cited instances where the agency mentioned giveaways, particularly in the case against Tron founder Justin Sun.

At that time, the agency stated that airdrops could be considered as “the sale or distribution of securities.” According to Emmer and McHenry, developers were forced to “exclude Americans” from the list of cryptocurrency recipients during the distribution.

“By prohibiting citizens from participating, the SEC prevents digital asset users from fully realizing the benefits of blockchain,” the lawmakers explained.

The letter contains several questions for Gensler, including how the agency plans to differentiate airdrops from airline miles or credit card points.

The head of the Commission is expected to respond to the request by September 30.

Earlier this month, a group of congressmen sent a letter to Gensler demanding an explanation of hiring criteria due to suspicions of favoritism.

In 2023, a bill was proposed in the House of Representatives to dismiss the SEC head. In August, following Grayscale’s court victory against the regulator, a similar initiative resurfaced.