Republican lawmakers blame the US Securities and Exchange Commission (SEC) for the lack of compliance among cryptocurrency firms. They argue that the SEC has failed to provide clear guidelines, leading to confusion and hindering the development of the industry. This development highlights the need for clearer regulations on cryptocurrencies in the US.
Republican Lawmakers Slam SEC Chair Gary Gensler’s Approach to Regulating Digital Assets Industry
SEC Chair Gary Gensler has come under fire from Republican lawmakers who criticized his approach to regulating the digital assets industry. In a letter addressed to Gensler, the lawmakers accused him of forcing the ecosystem into a regulatory framework that’s not suitable, and of failing to provide clear rules and path for crypto trading firms to register with the financial watchdog.
The letter emerged just ahead of Gensler’s testimony before the House Financial Services Committee, where he was expected to discuss oversight of the Securities and Exchange Commission, and after he celebrated his second full year at the Commission’s helm. In a tweet commemorating the milestone, Gensler highlighted the agency’s 1,500 enforcement actions filed over the past two years, which he said involve actions against “rampant noncompliance in the crypto markets.”
However, the letter accuses Gensler of being responsible for the perceived lack of compliance in the digital assets industry due to a lack of clear rules and a nonexistent path for crypto trading firms to register with the agency. It goes on to state that “the only entity to blame for the lack of registrants is the SEC itself.”
Signaling a unanimous sense of criticism on behalf of Republicans on the House Financial Services Committee, the letter was signed by each member. One of them, Ohio Representative Warren Davidson, has said he plans on introducing legislation to have Gensler fired.
Committee Chairman Patrick McHenry also took aim at Gensler ahead of his testimony, condemning his performance as a regulator on Tuesday morning. McHenry referenced legislation that would clarify how cryptocurrencies would be considered commodities versus securities, an area of disagreement between the Commodity Futures Trading Commission and the SEC that could impact which regulator has authority over swaths of the industry.
From Gensler’s point of view, rules for the digital assets industry “actually already exist” in the form of today’s securities laws. He has leaned on the Howey Test as a guide for determining what digital assets constitute a security versus a commodity.
The letter concludes by urging the SEC to work with Congress to ensure innovators and investors have proper protections and yield regulatory clarity that actors in the digital assets space have been seeking for years.