US congressman attacks SEC boss over crypto regulation

During a recent appearance on the Unchained Podcast with Laura Shin, House Majority Whip Tom Emmer attacked SEC Chairman Gary Gensler, calling him a “poor faith regulator” who is impeding the development of the crypto industry in the U.S.

Gensler, according to Emmer, has been “blindly showering the crypto community with enforcement actions” while failing to address the real troublemakers in the industry. The congressman promised to “continue to raise the siren of hypocrisy” and cooperate with bipartisan colleagues like Congressmen. Ro Khanna, Darren Soto, and Ritchie Torres to promote the development of the cryptocurrency and digital asset sectors.

Emmer compared the SEC’s strategy to the CFTC’s, which recently filed a lawsuit against Binance for allegedly marketing unregistered crypto derivatives products to U.S. clients. The CFTC sued Binance, Zhao, and its former top compliance executive with “willful evasion” of U.S. law, “while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit.”

In contrast to Gensler’s interactions with businesses like Coinbase, the Republican Congressman believed that this enforcement action was a proper use of the agency’s jurisdiction. 

SEC vs crypto growth in the U.S.

The top Republican recalled how the SEC declined to offer input on a product Coinbase was considering listing despite numerous meetings over a number of months, only to issue a Wells notice later on the same concerns for which the firm had asked for help.

 The SEC has persisted in its position Insisting that Coinbase’s lending program constitutes the sale of unregistered securities, a violation of federal securities laws. The SEC has stated that because investors give money to Coinbase in exchange for the guarantee of a return on their investment, the lending program satisfies the legal definition of a security.

In response to the SEC’s accusations, Coinbase has asserted that its loan program is not a security and that the SEC’s stance is based on an incorrect understanding of how the program operates. Coinbase has also maintained that by regulating the cryptocurrency market in this way, the SEC is going beyond the scope of its power.

Emmer concluded by stating that cryptocurrencies will succeed with or without the United States, but he bemoaned the administration’s and “unelected bureaucrats’” politicization of the technology. He argued that the regulatory measures being sought only serve to restrict American opportunity and economic growth, which could harm the country’s status in the global economy.