US Lawmakers Slam SEC and Chair Gensler for Refusing to Provide Clear Regulation for Crypto Industry – U.S. Representatives Patrick McHenry (R-NC) and Tom Emmer expressed strong disapproval of the Securities and Exchange Commission (SEC) and its Chairman Gary Gensler for rejecting Coinbase’s plea for transparent cryptocurrency regulations.
Following Gensler’s statement in support of the SEC’s decision, Congressman McHenry commented on social media platform X: “SEC Chair Gary Gensler’s continued refusal to provide clarity for the digital asset ecosystem is shameful. If ‘the law is clear’ in support of his position, why does the SEC keep losing in court?”
The lawmaker from North Carolina added in a follow-up post on X that one of the bills in Congress that addresses crypto regulation, the Financial Innovation and Technology for the 21st Century Act (Fit21), requires both the SEC and the Commodity Futures Trading Commission (CFTC) “to conduct rulemakings with clear marching order.” He emphasized: “This will result in more robust consumer protection and clarity for market participants.”
McHenry, who has been pushing for clear crypto regulation, is retiring from Congress at the end of his current term in January next year. Another U.S. lawmaker, Congressman Tom Emmer (R-MN), also slammed the SEC’s denial of Coinbase’s petition. He wrote on X: “The SEC’s policy to provide less clarity to the marketplace instead of more is designed to create chaos and it will corrupt our great capital markets. It is wrong and a clear violation of the SEC’s mandate.”
Gensler maintains that the legal framework for digital assets is unambiguous. He asserts that, with the exception of bitcoin, all other cryptocurrency tokens should be classified as securities. The SEC chairman also recently revealed that the regulator is taking a litigation-heavy strategy to regulate the crypto industry because “the field is so rife with hucksters and fraudsters and non-compliant parties.”
He further noted: “This is a field where the American public is at risk and being harmed every day on these platforms that are commingling and often trading against their customers.” While Gensler endorses the SEC’s choice to reject Coinbase’s request, two SEC commissioners, Hester Peirce and Mark Uyeda, expressed disagreement with the decision.
They issued a joint statement Friday, stating: “In our view, the petition raises issues presented by new technologies and other innovations, and addressing these important issues is a core part of being a responsible regulator.” “Any exploration of these issues should include public roundtables, concept releases, and requests for comment, which would afford us the opportunity to hear from a wide range of market participants and other interested parties.
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Then, using what has been learned, the Commission could issue guidance or engage in rulemaking as needed,” the commissioners added. The SEC has recently faced setbacks in legal disputes with cryptocurrency companies such as Ripple Labs and Grayscale Investments. Regarding the Grayscale case, Gensler stated this week that the SEC is adhering to its powers and aligning with court interpretations.