The SEC’s tough enforcement of the cryptocurrency industry has caused complaints, and the U.S. House of Representatives criticized: Contempt of Congress!

The SEC's recent strong enforcement against the cryptocurrency industry and the comments made by SEC Chairman Gary Gensler have caused dissatisfaction among many industry insiders, and even some U.S. congressmen and former regulators have begun to believe that Gary Gensler's tasks exceed his responsibilities. capabilities and are undermining Congressional efforts to regulate the digital asset industry.

Members of Congress also disagree with SEC Chairman’s style

According to MarketWatch, New York Democratic Congressional Representative Ritchie Torres told the media:

“The latest enforcement action against Coinbase is an extreme example of regulation through enforcement and shows utter contempt for Congress as it crafts the regulatory framework for cryptocurrency.”

Ritchie Torres, a member of the House Financial Services Committee that oversees the SEC, said Gensler’s current stance is evidence of a fundamental change in his views on technology from when he taught a course on blockchain and money at MIT in 2018. Ritchie Torres believes the change was politically motivated. :

"His views on the law are constantly evolving. Mr. Gensler has gone from an enthusiastic supporter of cryptocurrencies to a crypto-sceptic, painting cryptocurrencies as villains in order to project himself as a political hero."

Even the Democratic Party has criticized Gary Gensler's actions, not to mention members of the Republican Party who have been critical of Gensler appointed by Biden.

This week, Arkansas Representative French Hill, who is also the chairman of the House Digital Assets Subcommittee, said at an event that Gary Gensler’s series of enforcement actions against Coinbase and Binance were to cover up previous mistakes and to distract the public from the SEC’s unsolved actions. The attention that would prevent FTX from crashing.

Former SEC Enforcement Division Counsel: Waste of Resources

In an interview last month at the Atlanta Fed Financial Markets Conference, Gensler touted the number of cryptocurrency-related enforcement cases filed by the SEC, which he estimated to be as high as 140. The ambition of these actions has increased significantly with the Binance and Coinbase lawsuits, according to former SEC Enforcement Division senior counsel Philip Moustakis.

He believes that Coinbase’s case does not involve fraud, but mainly Coinbase’s failure to register itself as a securities exchange with the SEC, and taking enforcement action in this regard is a waste of SEC resources.

Coinbase’s lawsuit relies in part on the SEC’s definition of tokens as securities, which states that several of the tokens offered on the Coinbase platform are securities and therefore Coinbase operates as an unregistered securities exchange. Philip Moustakis said the law is actually unclear as to whether these tokens, such as Solana and Cardano, are securities.

"This does not appear to be an optimal allocation of law enforcement's time and resources, which one would prefer to focus on clear violations of the law."

The SEC will need to devote significant resources to these cases because it claims that more than ten cryptocurrencies are securities, each of which has an issuer, investor, or other market participant with a financial interest in the outcome of the proceedings, which expands The number of people who have a financial interest and want the SEC to lose the case. The SEC previously filed a lawsuit against Ripple, which took 2 and a half years, involving just one token.

Pinning your hopes on the U.S. Congress?

Some industry representatives believe that the U.S. government has launched a "war" against cryptocurrencies, and are increasingly looking to Congress to pass legislation to create a new framework for cryptocurrency regulation. Katherine Dowling, a former assistant U.S. attorney and general counsel at Bitwise Asset Management, believes that a bill on the structure of the cryptocurrency market is urgently needed.

In an interview with MarketWatch, she said these recent enforcement cases may inspire Congress to work more diligently on legislation that creates space for consumer protection and the cryptocurrency industry to thrive.

However, pinning your hopes on Congress acting quickly is often a losing strategy, according to Ian Katz, a financial services analyst at Capital Alpha Partners. He wrote in a note on Thursday:

“There is an argument that the SEC’s action will push Congress to quickly pass comprehensive cryptocurrency legislation. This logic is reasonable, but it fails to take into account Congress’s incompetence in handling complex tasks that are not critical to the functioning of the country.”

This article caused complaints about the SEC’s tough enforcement of the cryptocurrency industry, and the U.S. House of Representatives criticized it: contempt of Congress! First appeared in Zombit.