SEC Chair Gary Gensler Reacts to the Lummis Bill and Oversight Plans
- The Responsible Financial Innovation Act aims to give digital asset oversight powers to the Commodity Futures Trading Commission (CFTC).
- While the crypto market views such an outcome as crypto market-friendly, SEC Chair Gary Gensler has other ideas.
- On Tuesday, the Wall Street Journal reported that Gensler is dissatisfied with lawmaker plans.
Regulatory chatter continues to grab the crypto headlines in what has become a busy year for lawmakers and regulators. SEC Chairman Gary Gensler has not been far from the headlines, with the SEC eyeing the task of regulating the digital asset space.
Last week, we reported on a likely battle between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over the appointment to regulate digital currencies.
The report was in response to a bipartisan bill beginning its passage on Capitol Hill, which looks to give the CFTC the coveted job of overseeing the digital asset space.
SEC Chair Gary Gensler Voices Dissatisfaction Over the Lummis Bill
On Tuesday, the Wall Street Journal reported SEC Chair Gary Gensler raised concern over lawmaker legislation that “could compromise regulations that govern the broader capital markets.”
Gensler held back from commenting directly on the bipartisan Lummis and Gillibrand bill.
The SEC Chair did say,
“We don’t want to undermine the protections we have in a $100 trillion capital market.”
“Like behaviors should have like treatment.”
Last week, US senators Cynthia Lummis and Republican Kirsten Gillibrand filed the Responsible Financial Innovation Act.
The bill aims to tackle the classification of digital currencies as securities and non-securities. This is a subject on which US lawmakers, the SEC, and the CFTC have yet to agree.
Gensler’s comments come at a tumultuous time for the digital asset space.
The collapse of TerraUSD (USTC) and investor jitters over Fed monetary policy have weighed on investor sentiment.
A Balance Between Oversight and Innovation Is Needed for Cryptos
US regulatory uncertainty also remains a crypto market impediment.
Earlier this year, lawmakers sent a letter to the SEC Chair questioning the SEC’s approach toward crypto firms. Lawmakers raised concerns that the SEC could stymy innovation. The letter was bipartisan, with both sides of the aisle co-signing the letter.
With the SEC and the CFTC failing to find common ground, lawmakers may solve the issue.
Neither are likely to give up without a fight. Lawmakers and regulators anticipate continued growth in the digital asset space.
Until the US crypto market has clarity on the regulatory front, the SEC will continue to target crypto firms. A resolution could be around the corner, however.
This week could prove pivotal, with a court ruling on an SEC motion to protect William Hinman speech-related documents under the attorney-client privilege expected.
In 2018, the former SEC Director of the Division of Corporation Finance stated that Bitcoin (BTC) and Ethereum (ETH) are not securities.
The SEC case against Ripple Lab has been ongoing since December 2020. For lawmakers, the outcome could be decisive on who oversees the digital asset space.
The SEC alleges that Ripple raised over $1.3bn through an unregistered, ongoing digital asset securities offering.
On Tuesday, Stuart Alderoty, General Counsel for Ripple, talked about the failures to come to a consensus on how to classify cryptos.
Taking aim at the SEC, Alderoty said,
“4 years since the (in)famous Hinman speech, and we’re nowhere closer to knowing how to classify digital assets in the US – keeping every crypto, including ETH, in regulatory limbo.”
With the SEC v Ripple case hanging in the balance, a former SEC employee speech could ultimately decide who regulates the digital asset space.