Representatives French Hill and Dusty Johnson speculated that the SEC may have taken some crypto-related steps “seemingly timed to coincide with related Congressional activity”.
Two prominent members of the US House of Representatives are joining the chorus of those criticizing Securities and Exchange Commission (SEC) chair Gary Gensler’s approach to regulating digital assets, forming a potent coalition. On July 19, Representatives French Hill and Dusty Johnson addressed Gensler a persuasive letter pleading with him to abandon the SEC’s “regulate by enforcement” posture in favor of a more fruitful legislative strategy.
Representative Hill chairs the Subcommittee on Digital Assets, Financial Technology, and Inclusion, while Representative Johnson chairs the Subcommittee on Commodity Markets, Digital Assets, and Rural Development. These two lawmakers play crucial roles.
They support a legal framework that would give companies that deal in digital assets a clear and organized way to comply with consumer protection laws. This strategy eschews harsh enforcement measures that are taken after the damage has already been done in order to stop future failures and protect investors.
The SEC cannot continue to regulate by enforcement. The lawsuits filed against digital asset firms are not protecting the public and are stifling innovation and growth.— Rep. Dusty Johnson (@RepDustyJohnson) July 19, 2023
My letter to SEC Chair Gensler ⬇️ pic.twitter.com/RjoBNs5YQs
The letter also emphasized SEC activities that appeared to coincide with related Congressional activity as a show of solidarity, implying a planned strategy for maximum media and political impact. Other members of Congress have concerns about the timing of the SEC’s accusations against former FTX CEO Sam Bankman-Fried, particularly in light of his scheduled hearing before the House Financial Services Committee.
The SEC v. Ripple decision, which implied that XRP might not be considered a security, was presumably referenced in the letter’s mention of a “recent summary judgment” influencing cryptocurrency regulation. House Representatives have continued to urge Gensler to reevaluate the commission’s existing strategy to regulating cryptocurrencies in light of this decision. The SEC chair expressed disappointment in the ruling, considering its potential impact on retail investors, and indicated the commission would be reassessing the situation.
A draft market structure bill that intends to define the duties of the SEC and the Commodity Futures Trading Commission in regulating cryptocurrencies is currently being actively considered by the House Financial Services Committee. Legislators and business executives have shown considerable interest in the bill, even though it hasn’t yet been formally introduced. As a result, they may provide input or suggest changes that would help the United States regulate digital assets in the future.
The landscape of digital asset regulation is about to undergo a seismic shift as these powerful voices come together. The crypto community waits with hope for a regulatory framework that encourages innovation, safeguards investors, and drives the industry towards a successful future as politicians and regulators dance in a dynamic way.
Stay tuned, for this is just the beginning of an enthralling saga in the world of digital asset regulation and we are here to serve it hot for you