SEC Chairman Gary Gensler is currently speaking in Congress about the cryptocurrency market. In a discussion with Patrick McHenry, he was accused of failing to regulate cryptocurrencies.
Gary Gensler criticized for failing cryptocurrency regulations
House Financial Services Committee Chairman Patrick McHenry accused Gary Gensler of failing to explain how crypto companies should comply with the law, in the preliminary arguments of the meeting, which is currently underway.
The SEC Chair faced the House Financial Services Committee at a hearing on the SEC’s oversight. In a pre-trial statement, Gensler reiterated his stance that crypto market assets are already compliant with current securities laws.
Chairman McHenry said that during Gensler’s tenure as SEC Chair, the regulator has undertaken as many as 50 separate enforcement actions against the crypto market, despite not explicitly setting rules for stakeholders to operate. The Chairman of the Committee noted that the SEC is seeking $78 million in funding to continue expanding its enforcement actions, adding:
It is inappropriate to penalize crypto market companies without explicitly mentioning the rules on how they must comply. Regulation by enforcement is not sustainable.
Conflicting views of the SEC on cryptocurrency regulations
A U.S. House Republican committee led by Patrick McHenry is heavily critical of SEC Chairman Gary Gensler. In a letter to Gensler on Tuesday, McHenry addressed his approach to the crypto market ecosystem during his tenure with the SEC.
Lawmakers reveal Gensler’s contradictory position on the SEC’s efforts to set clear rules for crypto market compliance.
“Exchanges are forced into regulatory frameworks”
Gensler said in his pre-trial statement that crypto exchanges trade securities and must register with the SEC. The letter states that the SEC is forcing crypto companies into regulatory frameworks that are incompatible with underlying technology and do not apply over laws related to securities offerings. In his statement, Gensler argued that “most cryptocurrencies are securities.”
cryptocoin.comWe have included the explanations about XRP and Ethereum in this article.
Is Ethereum a commodity or a security?
McHenry repeatedly cut back on Gensler’s responses, pointing to the SEC chairman’s classification of Bitcoin as a commodity. He also highlighted the ongoing debate and uncertainty regarding cryptocurrency schemes in the United States, pointing to the specific discussions regarding ETH prior to the hearing.
The congressman specifically asked whether ETH should be classified as a security under the jurisdiction of the SEC or as a commodity under the opinion of the Commodity Future Trading Commission (CFTC). Despite the pressure, Gensler chose not to elaborate on any particular markers.
As a result, the lack of clarity is causing confusion and uncertainty in the industry. The committee urged Gensler to partner with Congress to create clear and unambiguous legislation that establishes clear guidelines for cryptocurrency regulation.
