Ahmed Ali The U.S. Securities and Exchange Commission (SEC) has come under fire from numerous lawmakers for employing a regulatory approach towards cryptocurrencies, which they perceive as enforcement. One of these legislators opined that the SEC’s recent moves against the Coinbase crypto exchange reveal a complete disregard for Congress, which is currently crafting a regulatory framework. Another argued that had this regulatory framework been already set up, the SEC wouldn’t have needed to initiate their current measures.
Accusations Aimed at SEC and Its Chair Gary Gensler
The SEC and its Chair Gary Gensler are the recipients of intense backlash for their perceived punitive regulation of the crypto sector, following the SEC’s recent actions against two prominent cryptocurrency exchanges.
Coinbase, a crypto exchange listed on Nasdaq, encountered a lawsuit from the SEC, while Binance and its CEO, Changpeng Zhao (CZ), were slapped with 13 charges by the regulatory body the previous day. The SEC has classified 12 crypto tokens in the Binance lawsuit and several more in the Coinbase lawsuit as securities.
U.S. Representative Ritchie Torres (D-NY), who serves on the House Financial Services Committee supervising the SEC, criticized the regulatory body’s recent enforcement action against Coinbase as a stark case of regulation through enforcement. He highlighted that it shows utter disrespect for Congress, which is actively working on a framework.
Torres noted a stark shift in Chairman Gensler’s stance on cryptocurrencies, as compared to his previous positive views on the technology when he instructed a blockchain and money course at the Massachusetts Institute of Technology (MIT) in 2018.
He outlined:
Gensler’s perspective on the law is ever-evolving. He’s transitioned from being a proponent of crypto to a critic. Now, he paints crypto as the bad guy to elevate his political standing.
Several other legislators, including Senators Cynthia Lummis (R-WY) and Bill Hagerty (R-TN), and Congressman French Hill (R-AR), who chairs the House subcommittee on digital assets, expressed similar dissatisfaction with the SEC’s and Gensler’s enforcement-focused method of crypto regulation. Hill contended on Monday that the SEC’s recent clampdown is a deflection strategy to cover their inability to halt the downfall of the crypto exchange FTX.
Last week, Hill and other lawmakers disclosed a discussion draft of legislation intended to offer a statutory structure for digital asset regulation that provides clarity, addresses regulatory shortcomings, and promotes innovation, all while safeguarding consumers.
In a CNBC interview on Wednesday, Hill explained: “The incidents with Coinbase and Binance, along with the notorious collapse of FTX last year, highlight the need for a clear, concise, statutory framework.” He emphasized:
This is the reasoning behind introducing this bill… Had this bill been already in effect, the SEC wouldn’t need to resort to the measures they have adopted.
We welcome your thoughts on the SEC’s actions against Coinbase and Binance in the comments section below.
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Frequently Asked Questions (FAQs) about SEC Crypto Exchange Enforcement Actions
What is the issue with the SEC’s recent actions towards crypto exchanges?
The U.S. Securities and Exchange Commission (SEC) has been criticized by multiple lawmakers for its enforcement actions against major cryptocurrency exchanges, such as Coinbase and Binance. They argue that the SEC’s approach displays a disregard for Congress, which is currently working on developing a comprehensive regulatory framework for the crypto industry.
Who has criticized the SEC’s actions?
Several lawmakers, including U.S. Representative Ritchie Torres (D-NY), Senators Cynthia Lummis (R-WY) and Bill Hagerty (R-TN), as well as Congressman French Hill (R-AR), have criticized the SEC’s enforcement-focused approach towards regulating the crypto industry.
What are the specific accusations against SEC Chair Gary Gensler?
Gary Gensler, the SEC Chair, has been accused of changing his stance on cryptocurrencies, moving from a proponent to a critic. Some lawmakers, including Rep. Ritchie Torres, suggest that he is portraying crypto negatively to boost his political standing.
What are lawmakers proposing instead of the SEC’s enforcement actions?
Lawmakers are calling for a clear, statutory framework to regulate digital assets. Such a framework would provide clarity, address regulatory gaps, foster innovation, and offer adequate consumer protections. They believe this could prevent the SEC from having to take punitive enforcement actions.
What specific actions did the SEC take against Coinbase and Binance?
The SEC filed a lawsuit against Coinbase and hit Binance and its CEO, Changpeng Zhao (CZ), with 13 charges. The SEC has also classified several crypto tokens in the Binance and Coinbase lawsuits as securities.
More about SEC Crypto Exchange Enforcement Actions
- U.S. Securities and Exchange Commission (SEC)
- Coinbase Official Website
- Binance Official Website
- Congressman Ritchie Torres
- Senator Cynthia Lummis
- Senator Bill Hagerty
- Congressman French Hill
- Gary Gensler MIT Course
5 comments
Wow, the SEC sure seems to be on a roll, huh? didn’t realise they’d go after coinbase like that…thought they were the good guys!
Gensler changed his tune real quick. Once a cheerleader, now a critic. Politics, am I right?
Is anyone else just tired of all this? like can’t they just make up their minds about crypto? the back and forth is exhausting…
I’m not an expert, but shouldn’t this be more about developing proper regulations, not playing the blame game? just a thought.
Seems like it’s high time for that clear regulatory framework they’re talking bout. Can’t be having the SEC running wild.