A US Republican lawmaker who serves as the chairman of the House Digital Asset Oversight Subcommittee has sharply criticized the US Securities and Exchange Commission (SEC) and its Chairman Gary Gensler for “injecting politics” into the regulation of cryptocurrency companies.
During a September 18 hearing of the House Subcommittee on Digital Assets, Financial Technology, and Inclusion, Arkansas Representative French Hill asserted that Chairman Gensler’s approach to digital assets has led to “confusion and uncertainty” in the market. During the hearing, he proposed alternative regulatory approaches for cryptocurrencies, including the 21st Century Financial Innovation and Technology Act ( FIT21 ), which is currently under XEM by Congress.
“Our support for FIT21 and the cross-party regulatory framework does not mean we oppose the SEC in prosecuting bad actors or modernizing the rules to accommodate digital asset securities and other unique instruments. We simply oppose the SEC abusing its enforcement power and making it difficult for legitimate organizations trying to comply with the rules to innovate and develop technology for the market.”
The subcommittee’s ranking member, Rep. Stephen Lynch, a Democrat, pushed back against accusations of politicization by the SEC, arguing that millions of dollars from the crypto industry are being used to support or oppose candidates in the 2024 congressional elections. He suggested that the industry is organizing anti-crypto regulation protests in Congress.
“If anyone is playing politics, it’s the crypto industry,” said Rep. Lynch, noting that while much of the digital asset space is struggling, the remaining operations are often used to facilitate illicit financial activity.
Lynch also pointed out that former President Donald Trump launched a “poorly thought-out cryptocurrency project ” ahead of the November election. He argued that US lawmakers are wasting time discussing regulations that affect a small part of the financial sector instead of focusing on the potential benefits of the technology.
Former SEC Commissioner Dan Gallagher, who now works at Robinhood, and former enforcement director Michael Liftik testified at the hearing. Gallagher called on Congress to intervene with legislation to address the SEC’s “regulation by enforcement” approach to crypto, which he said has led to “inconsistencies” in the industry.
North Carolina Representative Wiley Nickel, a Democrat and a strong advocate of digital assets in Congress, also said that Chairman Gensler is taking a “politicized” and “completely wrong” approach to cryptocurrencies.
In July, Nickel joined in writing a letter to Democratic National Committee Chair Jaime Harrison, pointing out that Vice President Kamala Harris had the opportunity to change public perception of the party’s stance on digital assets.
“Gensler is harming consumers, innovation, and American competitiveness, as well as the Democratic administration,” Nickel said at the hearing.
Lawmakers held the hearing just 48 days before the U.S. midterm elections, the outcome of which could impact leadership of the House Financial Services Committee and its Digital Assets subcommittee, which could remain Republican or switch to Democrats in 2025.
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According to Cointelegraph
