U.S. Congressman Tom Emmer has lashed out at SEC Chair Gary Gensler, calling him an “incompetent cop on the beat” in a heated hearing on April 18. Emmer criticized Gensler’s lack of clarity on digital asset regulation, particularly regarding to the need for clear rules to foster innovation and protect investors in the crypto market.
During the hearing, Republicans on the House Financial Services Committee voiced their concerns about the SEC’s approach to digital asset regulation. They accused the SEC of forcing digital asset trading platforms to register under the national securities exchange (NSE) framework, which they argued was an ill-fitting framework for digital assets. This is especially evident when talking about the need for a legal framework for decentralized finance (DeFi) and other kinds of innovations that do not fit the pre-existing NSE framework.
Emmer went on to accuse Gensler of pushing American firms into the “hands of the CCP (Chinese Communist Party)” and not finalizing any rules that accommodate the existing regulatory framework and are specifically for the digital asset industry. They also said the crypto-cryptic SEC Chair is inappropriately regulating the trillion-dollar crypto market through mere public statements.
He filibusters on simple questions: pic.twitter.com/n1rMwfmfSL
— Tom Emmer (@GOPMajorityWhip) April 18, 2023
Tom Emmer further said on Twitter that,
“He [Gary Gensler] was the “cop on the beat” when the biggest crypto frauds collapsed, doing nothing to stop these criminals before they defrauded Americans.”
However, Gensler defended the SEC’s record of enforcement against the digital asset industry, citing charges brought against Genesis, Gemini, Kraken, and Coinbase for offering unregistered securities. He also stated that most coins and tokens fall under the securities definition, but many market participants and regulators claim that the body is overstepping its authority.
Regulators Want Gary Gensler Removed as SEC’s Chair
The lack of clarity provided by the SEC regarding what digital assets are considered securities has made it difficult for NSEs to list such assets. The Republicans urged Gensler and the SEC to work with Congress to ensure innovators and investors have the regulatory clarity and protections they deserve.
Meanwhile, U.S. Congressman Warren Davidson also spoke at the conclusion of Gensler’s congressional hearing and called for the restructuring of the SEC and the removal of Gensler, citing his “failure to protect investors and abuses of power.”
The interesting clash between Gary Gensler and Republicans regarding the regulation of digital assets highlights the need for a collaborative effort to develop clear rules for digital assets to foster innovation in the United States and protect investors in the crypto market.