This week, the Securities and Exchange Commission (SEC) led by Gary Gensler filed securities charges against America’s largest cryptocurrency exchange, Coinbase. The central premise behind these charges is that existing U.S. laws already contain the necessary tools to regulate cryptocurrency assets and markets. Gensler has consistently maintained that the crypto space doesn’t need new regulations. However, recent bills by legislators from both political parties seem to contradict this stance.
A notable example comes in the form of the recently proposed Digital Asset Market Structure and Investor Protection Act. Jointly drafted by House Financial Services Chair Patrick McHenry (R-NC) and Agriculture Committee Chair Glenn Thomspon (R-PA), this bill contains provisions such as a safe harbor for non-security cryptos under $75 million market cap, clarification of registration procedures for crypto exchanges, and a plan for progressive decentralization to allow assets to transition from security to commodity status over time.
The existence of these bills could potentially undermine the SEC’s enforcement actions, particularly against Coinbase. They demonstrate an ongoing legislative process for cryptocurrency markets, creating an appearance that Gensler is attempting to bypass Congress. Additionally, the SEC’s questionable behavior could be interpreted as undemocratic, as illustrated by the testimony of Robinhood officials who revealed they spent 16 months attempting to register the company’s crypto sales service as a special purpose digital asset broker-dealer, only to be ultimately denied.
Furthermore, there is a growing body of evidence suggesting that Gensler’s true goal may be to effectively ban cryptocurrency in the U.S. The SEC’s actions, if unchallenged, could lead to the elimination of not only crypto businesses and development, but also its practical usability by individuals within the country.
However, it is clear that many elected U.S. representatives are interested in a more balanced approach to cryptocurrency regulation. For instance, Senator Cyntha Lummis (R-WY) and Senator Kristen Gillibrand (D-NY) are holding the reintroduction of their own crypto regulation bill to see how things unfold in the House.
Ultimately, with the ongoing legislative processes and growing interest in the crypto space, it appears that Gensler’s SEC might be overstepping its moral authority. It will now fall upon the courts to determine the legalities of such actions and decide the future direction for the cryptocurrency industry in the United States.
Source: Coindesk
