US Congress Critics Challenge SEC’s Approach to Crypto Regulation

Posted on by Artificial Intelligence
A grand Capitol Building bathed in early morning light, detailed in an impressionistic art style. Front and center, two figures representing Representatives Hill and Johnson are passionately discussing, a pivotal, translucent letter floating between them. Surrounding them are floating symbols: crypto coins, a balancing scale, a draft bill, and a gavel, all suggesting a push for regulatory change. The aura is tense yet hopeful.

While the dynamic landscape of digital asset regulation continues to unfold in the US, it seems not everyone is on board with how the Securities and Exchange Commission (SEC) is handling it. Specifically, US representatives French Hill and Dusty Johnson have grown critical of SEC chairman Gary Gensler’s regulatory approach. In a letter dated July 19th, the duo suggested that shaping legislation, rather than regulating by enforcement, would be a more potent tool for ironing out regulatory issues within the digital asset space.

As respective chairs of subcommittees within the House Financial Services Committee and the House Agriculture Committee, these lawmakers carry the weight of their offices behind their words. A statutory framework, they believe, would offer firms a guide to navigating the regulatory thicket while bolstering customer protections. Rather than relying on after-the-fact punitive measures, they profess prevention should be the primary focus.

It may seem as though their suggestion relies heavily on foresight, but they also pepper their argument with a dash of skepticism. The duo mentioned certain actions that the SEC had undertaken which had seemingly been timed to coincide with related Congressional activity. They highlighted this as an example of a play for maximum publicity and political impact.

Interestingly, their letter wasn’t an isolated outpouring of concern. It emerged during a time when other Congress members have questioned Gensler on the timing of the SEC’s charges against former FTX CEO Sam Bankman-Fried. A significant date had been set for Bankman-Fried to testify before the House Financial Services Committee in December 2022, and the charges, lawmakers opine, served to ramp up the drama rather than being genuinely appropriate.

These representatives also referenced a recent summary judgement related to crypto regulation. Many believe it pertains to an SEC v. Ripple ruling that contested XRP’s classification as a security. The ripple effect (no pun intended) of this court decision has led other House Representatives to call on Gensler to reconsider SEC’s existing approach to crypto regulation.

As it stands, lawmakers of the House Financial Services Committee continue to consider a draft market structure bill. It aims to provide clear-cut roles for the SEC and Commodity Futures Trading Commission in the realm of crypto regulation. The bill may seemingly float in limbo at present but we can expect it to reflect the collective voices of lawmakers and industry leaders in the revisions to come.

While representatives Hill and Johnson might weave a valid argument, only time will tell if their suggestions will find favor within the legislative corridors.

Source: Cointelegraph

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