As crypto-friendly lawmakers are increasingly voicing their opposition to a potential regulatory crackdown on this nascent industry, Republican Congressman Tom Emmer has criticized Garry Gensler, Chair of the US Securities and Exchange Commission (SEC), accusing him of overstepping his authority.
“All regulators want more jurisdiction and I can’t fault them for that,” Emmer told the Financial Times, then adding:
“But I think Gary Gensler’s vision is much broader, and frankly because of it, he’s having a negative impact — and potentially will have a really big negative impact — on retail investors and opportunities out there that entrepreneurs and innovators might provide.”
Speaking at a hearing of the House Committee on Financial Services on Tuesday, Gensler said he wanted crypto exchanges to be registered with the SEC.
“Right now [investors] don’t have the benefit of that basic bargain that we protect people against fraud and manipulation . . . People are going to get hurt,” he said.
Emmer replied and “strenuously” disagreed with the SEC Chair’s suggestion that almost all of crypto products are securities. “I think the vast majority of cryptocurrency offerings or related offerings are actually currencies or commodities. The SEC is not involved,” he said.
“If the SEC were to deem one of these coins a security, the value of that token would plummet. And those retail investors would be seriously hurt — that’s directly the opposite of his mission and his authority,” according to the congressman.
Emmer has also taken his criticism of Gensler to Twitter, asking if the Chair deems that a coin with a USD 1bn market capitalization and tens of thousands of investors is a security, then “what happens to those investors?” Per him, the value of the token would plummet and retail investors would not be able to trade it.
“Clearly there is no path for digital asset securities to be traded anywhere, so it is clear that retail investors would be hurt by Gensler’s actions,” he continued, calling on the SEC’s chair to “step out of the way.”
Gensler’s relatively tough stance on crypto and blockchain has triggered dissent among other SEC commissioners, including Hester Peirce who is one of the two Republicans on the regulator’s board. Peirce has voiced her opposition to attempts by her fellow regulators, including Gensler, to impose strict regulations on cryptocurrencies instead of promoting self-regulation – cautioning that this approach could thwart innovation.
Emmer represents Minnesota, and sits on the House Committee on Financial Services.