US lawmakers suggest SEC chair consider legislation rather than enforcement approach to crypto

US lawmakers suggest SEC chair consider legislation rather than enforcement approach to crypto

Reps. French Hill, and Dustin Johnson, suggested that the SEC could have taken certain crypto-related actions “seemingly coordinated to coincide with related Congressional activities.”


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Two US House of Representatives members have added their names on a list of legislators who criticize the Securities and Exchange Commission’s (SEC) Chairman Gary Gensler’s approach to digital assets regulation.

In a July 19 letter to Gensler, Reps. French Hill and Dusty Johnson suggested legislative action was a better approach for addressing regulatory issues within the digital asset sector than the SEC’s position of “regulate through enforcement.” Both lawmakers are chairs of the House Financial Services Committee’s and House Agriculture Committee’s subcommittees that study digital assets.

The letter stated that “legislation will do much more to prevent future collapses for digital asset companies than enforcement actions.” A statutory framework could help firms comply with consumer protections and enter the regulatory realm, instead of relying on enforcement action to punish bad actors after the damage is done.

Hill and Johnson referred to certain SEC actions as “seemingly timing” to coincide with related Congressional activities, which appeared calculated to maximize publicity and political impact. Other members of Congress questioned Gensler about the timing for the SEC’s allegations against former FTX Chief Executive Sam Bankman Fried, since he was scheduled to testify in front of the House Financial Services Committee on December 20, 2022.

Lawyers claim that Gensler, a former SEC adviser, offered to advise Binance in 2019.

They also referred to a recent summary judgement affecting crypto regulations, which likely refers to an SEC against Ripple ruling that suggested XRP ( ) is not necessarily a financial security. After the court’s decision, other House members have called for Gensler reconsidering the commission’s approach to crypto regulation. The SEC chairman said that he was disappointed in the ruling because of its impact for retail investors. He added that the commission will be assessing the current situation.

The bill has not yet been officially introduced and may be amended a data-amp=”–meet–lawmakers–discuss–crypto–legislation/amp”>based on feedback/a> from lawmakers and industry leaders. The bill is not yet officially introduced, and it may be modified in response to feedback provided by lawmakers and industry leaders.

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