The Blockchain Association, a cryptocurrency advocacy group, has hammered US SEC Chair Gary Gensler for his efforts to regulate the digital asset industry solely through enforcement actions and called him to step back.
On Thursday, June 29, The Blockchain Association released a paper saying that Gary Gensler should recuse himself from digital asset enforcement decisions as the agency had failed to fulfill its role as a rule-making body for the digital asset space, and he is not neutral towards the digital asset space.
1/ SEC Chair Gary Gensler has wrongly prejudged that all digital assets are securities.
As a result, federal law requires that he recuse himself from all enforcement decisions related to digital assets.@MTCoppel and I wrote a paper explaining why 👇https://t.co/xgJ09o4SPS
— Jake Chervinsky (@jchervinsky) June 29, 2023
According to the crypto advocacy group, the critical issue of whether and when a digital asset falls under securities status is still unaddressed. Instead of giving any guidelines and conducting rule-making, Gensler and the SEC just went after the industry. The paper reads.
“Despite continued requests from the industry for regulatory clarity, the SEC has refused to adopt any rules or issue any guidance on this issue, among many others, for over four years. Instead, the SEC has chosen to regulate digital assets solely through enforcement actions.”
The paper, citing Gary Gensler’s various speeches and statements, argues that he has prejudged that all digital assets other than Bitcoin are securities. This shows his clear bias against the digital asset industry. Therefore, it is required by federal law that he should recuse himself from enforcement decisions related to digital assets.
The Blockchain Association further said that the SEC chair had proven himself incapable of fulfilling the responsibility “to approach each proceeding with a fair, unbiased, and impartial mind.” The group wrote:
“His prejudgment that all digital assets except bitcoin are securities renders him incapable of fulfilling that responsibility. As a result, by participating in enforcement decisions related to digital assets, Chair Gensler violates the due process rights of individuals and companies who deserve a just and equitable hearing. He must recuse himself.”
Furthermore, the group complained that Wells’s process is also broken for digital assets. Other sectors are given ample time to present evidence and arguments in their defense. When it comes to digital assets, there is only one explanation: “All digital assets except for bitcoin are securities.”
Gary Gensler’s Stubbornness Towards Digital Assets is faced by the Blockchain Association
The whole text of the paper highlights the stubbornness of the SEC chair towards digital assets, according to the Blockchain Association. He always maintained that existing securities laws entirely circle the digital asset market. As reported, in a keynote speech at the 27 annual Financial Markets Conference in May, he iterated that crypto rules were “crystal clear”.
As a result, many prominent digital assets players like Binance, Coinbase, and Ripple are engaged in a legal battle with the securities regulator. Crypto firms have repeatedly expressed frustration over the lack of clear regulatory frameworks and the SEC’s regulation-by-enforcement approach.
