Internet Security

Congress seeks clarification from Yellen on crypto oversight plans, criticizes Howey Test

Share this article URL Copied Members of the US Congress have posed a list of questions in a recent letter to Treasury Secretary Janet Yellen in response to her call for enhanced oversight of crypto. Notably, they highlighted the limitations of the Howey Test in protecting consumers in the crypto market. The letter, signed by

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Members of the US Congress have posed a list of questions in a recent letter to Treasury Secretary Janet Yellen in response to her call for enhanced oversight of crypto. Notably, they highlighted the limitations of the Howey Test in protecting consumers in the crypto market.

The letter, signed by House Financial Services Committee Chair Patrick McHenry, House Agriculture Committee Chair Glenn Thompson, Rep. French Hill, and Rep. Dusty Johnson, seeks Yellen’s detailed explanation of how the regulatory framework should be shaped concerning digital assets, following her call earlier today.

Congress has requested clarification on the Securities and Exchange Commission’s (SEC) role. Notably, they have raised concerns about the effectiveness of the Howey Test, which is used to determine the classification of a transaction as an investment contract and, thus, a security. Congress is questioning whether the Howey Test is sufficient for providing adequate consumer protection.

The legislators have argued that the SEC’s retrospective application of the test does little to protect investors, stating:

“Chair Gensler has declared that “the vast majority of crypto tokens likely meet the investment contract test.” However, the final investment contract analysis is backwards looking, made by a court after the transaction in question has been completed. How does this reactive legal authority provide adequate protection for customers, in the absence of comprehensive legislation?”

Congress has also highlighted that the current regulatory framework does not cover a significant portion of the crypto-asset ecosystem, including Bitcoin and Ether. They have asked the Financial Stability Oversight Council (FSOC) whether these cryptocurrencies are considered securities. Led by Yellen, the FSOC brings together key financial regulators to monitor potential risks and safeguard the financial system.

Furthermore, Congressmen have expressed concern about regulatory gaps in spot markets for digital assets that are not considered securities. They are questioning if the Commodity Futures Trading Commission should expand its jurisdiction to include these spot markets, given its existing authority over certain aspects of non-security digital asset transactions. Congress expects to receive answers from Yellen by February 20.

Yellen has been actively advocating for stricter regulations after FTX’s collapse. In a testimony before the House Financial Services Committee on Tuesday, she warned of the risks associated with crypto platforms and stablecoins, urging Congress to enact stricter regulations for the crypto industry.

Share this article

Share this article

Members of the US Congress have posed a list of questions in a recent letter to Treasury Secretary Janet Yellen in response to her call for enhanced oversight of crypto. Notably, they highlighted the limitations of the Howey Test in protecting consumers in the crypto market.

The letter, signed by House Financial Services Committee Chair Patrick McHenry, House Agriculture Committee Chair Glenn Thompson, Rep. French Hill, and Rep. Dusty Johnson, seeks Yellen’s detailed explanation of how the regulatory framework should be shaped concerning digital assets, following her call earlier today.

Congress has requested clarification on the Securities and Exchange Commission’s (SEC) role. Notably, they have raised concerns about the effectiveness of the Howey Test, which is used to determine the classification of a transaction as an investment contract and, thus, a security. Congress is questioning whether the Howey Test is sufficient for providing adequate consumer protection.

The legislators have argued that the SEC’s retrospective application of the test does little to protect investors, stating:

“Chair Gensler has declared that “the vast majority of crypto tokens likely meet the investment contract test.” However, the final investment contract analysis is backwards looking, made by a court after the transaction in question has been completed. How does this reactive legal authority provide adequate protection for customers, in the absence of comprehensive legislation?”

Congress has also highlighted that the current regulatory framework does not cover a significant portion of the crypto-asset ecosystem, including Bitcoin and Ether. They have asked the Financial Stability Oversight Council (FSOC) whether these cryptocurrencies are considered securities. Led by Yellen, the FSOC brings together key financial regulators to monitor potential risks and safeguard the financial system.

Furthermore, Congressmen have expressed concern about regulatory gaps in spot markets for digital assets that are not considered securities. They are questioning if the Commodity Futures Trading Commission should expand its jurisdiction to include these spot markets, given its existing authority over certain aspects of non-security digital asset transactions. Congress expects to receive answers from Yellen by February 20.

Yellen has been actively advocating for stricter regulations after FTX’s collapse. In a testimony before the House Financial Services Committee on Tuesday, she warned of the risks associated with crypto platforms and stablecoins, urging Congress to enact stricter regulations for the crypto industry.

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FACT CHECK: SSS has no ongoing scholarship program

SUMMARY This is AI generated summarization, which may have errors. For context, always refer to the full article. The Social Security System warns the public about fake posts bearing the agency’s logo that contain suspicious links promoting an alleged scholarship program Claim: The Social Security System (SSS) posted an application link for its 2024 scholarship

This is AI generated summarization, which may have errors. For context, always refer to the full article.

FACT CHECK: SSS has no ongoing scholarship program
The Social Security System warns the public about fake posts bearing the agency’s logo that contain suspicious links promoting an alleged scholarship program

Claim: The Social Security System (SSS) posted an application link for its 2024 scholarship program offering elementary, high school, and college students allowances of up to P10,000. 

Rating: FALSE

Why we fact-checked this: The claim was uploaded on the Facebook page “Philippine Scholar,” which has been previously fact-checked by Rappler for disseminating false information on student aid supposedly from government agencies. 

The post claims that the 2024 SSS scholarship program offers P4,000 for elementary students, P6,000 for junior high school students, P8,000 for senior high school students, and P10,000 for college students.

The post also included a link to an unverified website where applicants are asked to provide their personal information such as name, email, and phone number. 

While the post was dated January 17, it continues to receive comments and engagements from Facebook users inquiring about the program. As of writing, the post has received 76 reactions, 224 comments, and 12 shares. 

Additionally, the website for the supposed application is still actively posting unverified scholarship programs from various public officials and agencies.

The facts: SSS does not offer the alleged scholarship program, the state-owned social insurance agency said in an advisory on January 18. 

Walang ongoing scholarship program ang Social Security System para sa mga miyembro at benepisyaryo nito, o maging sa publiko. Huwag maniwala sa mga balita, post o private messages sa social media na nag-aalok nito,” the advisory read.

(The Social Security System has no ongoing scholarship program for its members and beneficiaries, or even for the public. Do not believe the news, posts, or private messages on social media that offer this.)

SSS also warned the public that these misleading posts are likely schemes that may put their personal data at risk.

For SSS-related concerns, the public is advised to direct their inquiries to the official SSS channels or through their verified support ticket system, the uSSSap Tayo Portal.

Educational assistance: What SSS offers is the Educational Assistance Loan Program (EALP), a short-term member loan program for eligible SSS member-borrowers intended to defray educational expenses for undergraduate degrees and technical or vocational courses.

According to the EALP application form on the SSS website, the maximum loanable amount is P20,000 per academic term, or a maximum allocation of P160,000 and P200,000 in full allocation for four and five-year degree programs, respectively. 

Meanwhile, qualified member-borrowers may apply for a maximum amount of between P40,000 and P60,000 for vocational or technical courses.

The loan program is funded by both the national government and SSS. To apply, individuals must submit an accomplished EALP application form and supporting documents to the nearest SSS office.

Debunked: Rappler has published several fact-checks about fake scholarship programs allegedly from government agencies:

  • FACT CHECK: DepEd doesn’t offer up to P10,000 scholarship via online forms
  • FACT CHECK: Link for CHED-UniFast scholarship is fake
  • FACT CHECK: DOLE-NLRC has no scholarship program

Official accounts: For official updates on the programs and services of SSS, refer to its official website, X (formerly Twitter), Facebook, Instagram, TikTok, and YouTube accounts.  – Larry Chavez/Rappler.com

Larry Chavez is a graduate of Rappler’s fact-checking mentorship program. This fact check was reviewed by a member of Rappler’s research team and a senior editor. Learn more about Rappler’s fact-checking mentorship program here.

Keep us aware of suspicious Facebook pages, groups, accounts, websites, articles, or photos in your network by contacting us at factcheck@rappler.com. Let us battle disinformation one Fact Check at a time.

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