The members of House Republicans have slammed Securities and Exchange Commission Chairman, Gary Gensler, at a House oversight hearing for a nonsensical crackdown from his agency on crypto trading platforms.
“Your approach is driving innovation overseas and endangering American competitiveness,” Financial Services Chair Patrick McHenry (R-N.C.) said to Gensler Tuesday.
However, Gensler strongly defended his stance that crypto trading platforms and exchanges should be regulated by U.S. securities laws.
“All of these companies should come into compliance with the law, and until they do, we will continue to pursue them as the cop on the beat, and investigate and follow the facts and law,” Gensler argued to the panel.
In the four hours long hearing before the House Financial Services Committee, intense discussion about SEC’s ongoing crackdown on different crypto platforms happened.
During arguments, Republicans became a voice for many crypto firms by debating that the SEC’s rules were formed to regulate traditional markets. These rules do not fit when it comes to decentralized exchanges.
The companies are claiming that in the absence of new crypto-specific regulations created by Congress, digital platforms may choose to relocate overseas to avoid any issues with US regulators. They argue that if this happens, America’s position as a leading center for cryptocurrency innovation could be compromised, and the country may lose out to its rivals.
During the testimony, Gensler avoided discussing the details of the investigation related to the FTX collapse and the recent wells notice sent to Coinbase.
“Regulation by enforcement is not sufficient nor sustainable,” he added. “You’re punishing digital asset firms for allegedly not adhering to the law when they don’t know it will apply to them.”
Gensler refuted this allegation by countering, “We have a whole field in crypto that understands the law, and if they are providing exchange services, broker dealer services, clearing services of crypto security tokens, they should come into compliance.”
