U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler testifies during an oversight hearing of the Senate Committee on Banking, Housing and Urban Affairs in Capitol Hill, Washington, U.S., September 14, 2021.
Evelyn Hochstein | Reuters
WASHINGTON — Securities and Exchange Commission Chairman Gary Gensler faced criticism from House Republicans on Tuesday over his agency’s crackdown on crypto trading platforms.
In more than four hours of testimony before the House Financial Services Committee, Gensler stood firm in his view that crypto trading platforms and exchanges should comply with strict U.S. securities laws.
“All these companies must comply with the law. Until then, we will continue to pursue them like the police, investigate the facts and the law, and comply,” Gensler told the panel.
Republicans raised many of the points regularly raised by the cryptocurrency industry regarding regulation, stating that the SEC’s disclosure rules are designed to regulate traditional markets and are not suitable for decentralized digital currency exchanges. claimed no.
The companies argue that without Congressional legislation creating a new regulatory framework specifically for cryptocurrencies, digital platforms will move abroad to avoid conflicts with U.S. regulators.
They argue that this weakens America’s position as a hub for cryptocurrency innovation and could cede that position to its rival America.
“Your approach drives innovation abroad and jeopardizes American competitiveness,” said committee chair Rep. Patrick McHenry, RN.C., at the beginning of the hearing. told Gensler.
“Law enforcement regulation is neither sufficient nor sustainable,” says McHenry. “They are punishing digital asset companies for allegedly not complying with the law without knowing that the law applies.”
However, Gensler dismissed the notion that cryptocurrency trading platforms do not know how to interpret U.S. securities laws.
“We have the entire cryptocurrency sector that understands the law, and if they offer exchange services, broker-dealer services, or cryptocurrency security token clearing services, they are in compliance. Must be compliant” Hearing.
Through testimony, Gensler declined to discuss the details of the FTX demise investigation, and most recently notified Coinbase last month that the crypto exchange was under investigation.
The SEC has stepped up its crackdown on the cryptocurrency industry, putting pressure on companies and projects that claim to be selling unregistered securities. In mid-2022, Coinbase first reported his SEC investigation.
Faced with a House committee on Tuesday, Gensler showed little sympathy for the challenges facing US-operated cryptocurrency exchanges.
“We have a clear regulatory framework that has been built over 90 years,” he said. Exchanges are “just a bunch of intermediaries who think they have a choice in this marketplace. They don’t have a choice. They are generally non-compliant and should be compliant.” he added.
Prospects for legislation regulating digital currencies have faded this year with a showdown over the debt ceiling and a Republican majority in the House focusing on issues such as energy to counter a multi-pronged threat from China. .
Nonetheless, major crypto industry groups I plan to spend We have spent millions of dollars this year lobbying Congress and the Biden administration.
