Gensler’s relentless regulatory scrutiny of cryptocurrencies has led to growing dissent among members of his own agency.
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler’s crusade against the crypto asset industry has sparked political resistance. U.S. Rep. Warren Davidson is the latest to retaliate.
The Ohio representative said he is introducing legislation to remove Gensler as SEC boss to “correct a litany of abuses.”
SEC’s “unconstitutional overreach”
The announcement comes after the SEC said it would “modernize” a proposed redefinition of “exchange” under the agency’s rules, which could also include cryptocurrency market participants in decentralized finance (DeFi).
The SEC chairman said the rule amendment could be beneficial to both investors and the market because it would require placing certain brokers under additional regulatory scrutiny.
Emphasis will be placed on “modernizing” the concept of an “exchange,” which is more aptly described as a system that “brings together buyers and sellers of securities that offer non-corporate trading interests and provide an alternative, non-discretionary approach to securities.”
Therefore, the proposed amendments would require these systems to register as a national securities exchange or broker-dealer and comply with regulations for alternative trading systems (ATS). The SEC further added that the commission’s existing rules also cover DeFi.
Opponents
Gensler’s proposal and subsequent announcement targeting DeFi were a target for many crypto advocates who expressed concerns about the agency’s overreach. This prompted Coinbase’s legal chief Paul Grewal to go on to announce his intention to remove Gensler from his position to continue the crackdown.
US Representative Warren Davidson also chimed in and tweeted,
“To correct a litany of abuses, I am introducing legislation to eliminate the chairman of the Securities and Exchange Commission, disqualifying former SEC chairmen, and replace the role with an executive director who reports to the board (where the power lies).”
Nonprofit blockchain advocacy group Coin Center also hit back at the SEC, calling its approach “unconstitutional.”On the regulatory front, the SEC boss once again found himself under fire from Commissioner Hester Peirce, who took issue with Gensler’s policy moves.
DeFi Crackdown
The latest decision is far from the first salvo in attacks on DeFi. The industry is facing a relentless crackdown that industry advocates consider to be “extrajudicial” in nature. Last month, Sushi DAO and chef Jared Gray received subpoenas from the SEC.
Recently, the U.S. Treasury Department released its first illicit financial risk assessment report on DeFi.
