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Investing.com – Securities and Exchange Commission (SEC) Chairman Gary Gensler had a tough time on Tuesday before the US House of Representatives, which sharply criticized his agency’s crackdown on cryptocurrency exchanges. currencies.
During testimony that lasted over 4 hours, Gensler strongly defended his view that cryptocurrency exchanges and exchanges should comply with strict US securities laws.
“All of these companies should comply with the law, and until they do, we will continue to prosecute them, investigate and follow the facts and the law,” Gensler said.
Republicans have criticized that the SEC’s disclosure rules were designed to regulate traditional markets and are ill-suited to decentralized digital currency exchanges.
The SEC “endangers American competitiveness”
“Your approach pushes innovation overseas and puts American competitiveness at risk,” commission chairman Patrick McHenry, RN.C., told Gensler, for example, at the start of the hearing.
“Regulation by enforcement is neither sufficient nor sustainable,” McHenry added, accusing him of punishing “digital asset companies for not adhering to the law when they don’t know it’s there.” will apply to them”, an argument rejected by the boss of the SEC.
“We have a whole industry in crypto that understands the law, and if they provide exchange services, brokerage services, crypto security token clearing services, they should come into compliance,” he said. effect stated Gensler.
Gensler Pushes Crypto Businesses Into China’s Hands
MP Tom Emmer (R-MN) was also vehement towards Gensler, accusing him of having “been an incompetent policeman”, before claiming that Mr. Gensler was pushing American companies into the “hands of the CCP (Chinese Communist Party)”.
He further lamented the SEC’s inaction in creating a regulatory framework for cryptos:
“During your tenure at the SEC, how many rules have been finalized by the SEC that take into account the existing regulatory framework and that are specifically aimed at the digital asset industry so that the cryptocurrency market can get up and running? compliance? The answer is zero,” he said.
Gensler refuses to address FTX and Coinbase cases (NASDAQ:)
Of note, Gensler declined to discuss details of his investigation into FTX’s collapse and, as well as the Wells notice he gave to Coinbase last month, that the cryptocurrency exchange was under attack. ‘investigation.
Gensler further suggested that the US financial regulatory system has successfully stood the test of time, and it’s up to cryptos to adapt to it, not the other way around:
“We have a clear regulatory framework built over 90 years,” he said. Exchanges are “just a bunch of middlemen in this market who think they have a choice. They don’t have a choice. They are generally not in compliance with regulations, and they have to comply”, he added.
The USA acts like an aging empire in the face of cryptocurrencies
Finally, Omid Malekan, an assistant professor at Columbia Business School, who commented on the SEC’s action on the sidelines of Gensler’s address to Congress, called the US government’s attitude ill-informed.
“She’s counterproductive,” he said. “I’m almost embarrassed to say that America is now acting like an aging empire that just feels threatened by a new kind of financial system,” he added.
He further lamented that “instead of trying to figure out how to evolve to embrace it, there’s this arrogance within these regulatory circles of saying, ‘Well, we’re just going to shut it down. We will treat cryptocurrencies on our terms…using very outdated laws.”
He also felt that “this technology will become widespread because it solves important problems”, warning that “if it does not find its place in America, it will find it elsewhere. That means that a large part of the jobs and Tax revenues will now go to countries other than the United States.”