GOP Legislators Accuse Gensler's SEC of Manipulating News Cycle to Block Crypto Legislation
Finally, Australia's new administration makes its position on crypto legislation clear
Two GOP representatives in the U.S. House of Representatives have voiced their disapproval of the Securities and Exchange Commission's (SEC) strategy in regulating cryptocurrency. They have alleged that the timing of the regulator's actions is deliberately aimed at overshadowing and undermining attempts to draft all-encompassing legislation.
"While Congress works to close regulatory gaps, the SEC has opted to regulate by enforcement," Reps. French Hill (R-Ark.) and Dusty Johnson (R-S.D.) wrote in a letter sent Wednesday to the commission's chairman, Gary Gensler.
"This approach does not result in compliance and customer protection," they continued, "but instead creates further confusion, as demonstrated by the recent summary judgement" - a reference to Ripple's partial victory in its court fight with the SEC.
Making matters worse, Hill and Johnson wrote, were "certain Commission actions, seemingly timed to coincide with related Congressional activity, which appears calculated for maximum publicity and political impact."
The lawmakers' insinuation arises during a turbulent period for cryptocurrency in the United States. This comes in the wake of the FTX exchange and other prominent crypto enterprises collapsing last year, prompting surviving companies to search for more welcoming jurisdictions and startups to steer clear of establishing themselves within the country due to the implementation of stringent regulations.
While the lawmakers did not provide further details, it seems that they were alluding to the timing of the Securities and Exchange Commission's lawsuits last month targeting prominent cryptocurrency exchanges Binance and Coinbase.
Shortly after the Republican chairs of two House committees unveiled a preliminary proposal to revamp cryptocurrency regulations in the United States, these two instances emerged within a matter of days.
(To be equitable, Hill and Johnson employed a strategic media approach of their own. They shared the letter with journalists, stipulating that its publication should be withheld until a designated time, a customary procedure for both corporations and government officials.).
In their letter, Hill and Johnson highlighted a comprehensive compilation of evidence regarding the subject matter, including a discussion draft as well as two bills that have been introduced since 2021. Additionally, they emphasized the extensive efforts undertaken by their respective House committees (financial services and agriculture) through the organization of 15 hearings over the past four years.
The SEC's approach "does not protect the public," they argued. "Legislation would do far more to prevent future collapses of digital asset firms than enforcement actions. A statutory framework would establish a process for firms to come into the regulatory parameter and comply with consumer protections, rather than relying on enforcement actions to punish a bad actor after the damage has already been done."
They concluded their letter by extending an invitation to the SEC for a "productive engagement" regarding the mentioned legislation.
