Several lawmakers have slammed the U.S. Securities and Exchange Commission (SEC) for regulating the crypto industry by enforcement. One lawmaker says the regulator’s latest action against crypto exchange Coinbase “demonstrates a complete contempt for Congress which is in the process of developing a framework.” Another lawmaker stated that if the regulatory framework were in place, “the SEC wouldn’t have to take the actions that they’ve taken.”
Lawmakers Slam SEC and Chair Gary Gensler
The U.S. Securities and Exchange Commission (SEC) and Chair Gary Gensler have been heavily criticized for regulating the crypto industry by enforcement after the regulatory agency took action against two leading cryptocurrency exchanges this week.
The Nasdaq-listed crypto exchange Coinbase faced a lawsuit from the SEC on Tuesday, while and its CEO, Changpeng Zhao (CZ), were hit with 13 charges by the securities regulator a day earlier. The SEC labeled 12 crypto tokens as securities in the Binance lawsuit and several more in the Coinbase one.
U.S. Representative Ritchie Torres (D-NY), a member of the House Financial Services Committee that oversees the SEC, told Marketwatch on Wednesday:
The latest enforcement action against Coinbase is an egregious example of regulation by enforcement … It demonstrates a complete contempt for Congress which is in the process of developing a framework.
The congressman added that Chairman Gensler’s current position on crypto reflects a significant departure from his previous perspectives on the technology when he taught a course on blockchain and money at the Massachusetts Institute of Technology (MIT) in 2018.
His view of the law has been constantly changing … Mr. Gensler has gone from a crypto cheerleader to a crypto skeptic … He’s portraying crypto as the villain in order to portray himself as a political hero. Several other lawmakers have similarly criticized the SEC and Gensler for their enforcement-centric approach to regulating the crypto industry, including Senators Cynthia Lummis (R-WY) and Bill Hagerty (R-TN). Congressman French Hill (R-AR), who chairs the House subcommittee on digital assets, stated Monday that the securities watchdog’s recent crackdown is a “cover your ass” move to distract from its failure to prevent the collapse of crypto exchange FTX.
Last week, Hill and several other lawmakers released a discussion draft of legislation to provide “a statutory framework for digital asset regulation intended to provide clarity, fill regulatory gaps, and foster innovation, while providing adequate consumer protections.”
Hill told CNBC in an interview on Wednesday: “Both the action on Coinbase, on Binance, and of course the infamous collapse of FTX last year, speak to me that we need this clear, concise, statutory, framework.” The congressman emphasized:
That’s why we’ve introduced this bill … If we had this bill in place, then the SEC wouldn’t have to take the actions that they’ve taken.
What do you think about the actions the SEC took against Coinbase and Binance? Let us know in the comments section below.