Report: SEC Chief Growing in Power as Crypto Proponents Stumble
In the battle of cryptocurrency vs. regulators, one regulator is apparently winning.
A report Tuesday (July 11) by Bloomberg News looks at Securities and Exchange Commission (SEC) Chairman Gary Gensler’s role as chief enforcer of crypto regulations, and argues that so far, the industry and its allies in Washington haven’t been able to leash him.
After six months of hearings, the report said, the GOP-led House has yet to formally unveil proposals that would put checks on crypto regulators. The advent of the next presidential campaign could leave less time to debate the matter or win over Democrats in the Senate.
“Even if they do pull a rabbit out of the hat and get this out of the committee in a bipartisan way, get this to a floor vote, get it out of the House, there’s still going to be a significant hurdle to overcome with the Senate,” said Ron Hammond, director of government relations at the Blockchain Association, a cryptocurrency trade group.
And while the SEC faces court challenges, its power over the crypto sector seems to be growing, according to the report. The commission continues to claim the industry must adhere to its rules in the absence of new legislation.
Gensler spent four hours in April testifying before the House Financial Services Committee in a hearing titled, “Oversight of the Securities and Exchange Commission.”
As PYMNTS reported, he used that time to defend his agency’s rulemaking and ongoing enforcement of the crypto industry in the face of at-times combative criticism from legislators.
Gensler repeated his mantra that “nothing about the crypto markets is incompatible with the securities laws,” stressing that in his view, “the vast majority” of crypto tokens are securities.
“Given that most crypto tokens are securities, it follows that many crypto intermediaries are transacting in securities and have to register with the SEC,” he said, adding that the crypto industry presents “risks and conflicts the commission does not allow in any other marketplace.”
Since then, the SEC has taken action against two of the crypto sector’s biggest players. On June 5, the agency filed 13 charges against the world’s largest crypto exchange, Binance, and its founder, Changpeng Zhao, claiming the platform “engaged in an extensive web of deception.”
Less than 24 hours later, the regulator sued the U.S.-based and publicly listed crypto exchange Coinbase, alleging that the company had allowed its users to trade unregistered securities.
Both companies have denied the charges against them and accuse the SEC of trying to “regulate through enforcement.”
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