Congressional Republicans Slam SEC Chair Gary Gensler's Crypto Approach! Explosive Details Emerge in Today's Hearing – Coinpedia Fintech News
The battle between the US Securities and Exchange Commission (SEC) and the crypto industry has taken center stage as SEC Chair Gary Gensler faces criticism from Republicans on the House Financial Services Committee. The committee claims Gensler’s approach to crypto companies is not compatible with existing law, and his statements urging the industry to register are a “willful misrepresentation” of the agency’s frameworks. Amidst this tug-of-war, Gensler is set to testify before the committee, followed by a crypto-specific hearing discussing stablecoins.
Gary Gensler Faces Intense Criticism
In a bold move, Republicans on the committee have recently signed a letter arguing that national securities exchange regulations do not fit well with digital assets due to their potential for non-investment use. The letter accuses Gary Gensler, the chair of the Securities and Exchange Commission (SEC), of making a “willful misrepresentation” by urging the industry to “come in and register” with the agency. These statements, the Republicans argue, are inconsistent with the SEC’s current regulatory frameworks.
The letter said:
“Given an NSE can only list securities that have been offered in compliance with the securities laws, the inability to register makes the current NSE framework ill-suited for digital asset trading platforms. Moreover, the lack of clarity provided by the SEC as to what digital assets are considered securities also limits what an NSE can list.”
As the crypto industry eagerly awaits Gary Gensler’s testimony before Congress, the Securities and Exchange Commission (SEC) Chair has reaffirmed his stance on crypto regulation. In a prepared statement released on Monday, Gensler doubled down on his belief that “most crypto tokens are securities” and called for all crypto exchanges to register with the SEC.
This comes as the SEC has taken enforcement actions against several exchanges, including Beaxy and Bittrex, signaling Gensler’s push for exchanges to register as a national securities exchange, broker, and clearinghouse.
Gary Gensler Fails To Describe Crypto Regulations
During a hearing before the House Financial Services Committee, Chairman Patrick McHenry criticized Gary Gensler for his lack of clarity on how cryptocurrency firms should adhere to current laws and regulations.
SEC Chair Gary Gensler faced tough questioning during the hearing, particularly around the classification of Ethereum. Committee Chairman Patrick McHenry pressed Gensler on whether ETH should be considered a security or commodity, citing the SEC’s 50 enforcement actions in the crypto space. However, Gensler avoided giving a direct answer and instead offered a vague response, saying “it depends on the facts of the law,” much to the frustration of McHenry.
“Not clearly mentioning the rules as to how companies should comply and punishing them is not ideal.”
McHenry cited conflicting statements about whether Ethereum is a security or a commodity, including a 2018 statement by a former SEC director that it is not a security and a 2023 statement by the CFTC chairman that it is a commodity. He noted that the lack of clarity in the market is further compounded by the New York attorney general’s position on the matter.
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