The ongoing battle between the US crypto industry and the SEC has reached new heights.
🗣️ Yesterday, SEC Chair Gary Gensler spent over five hours testifying before the House Financial Services Committee, where he once again rejected crypto firms’ demands for clearer guidance and insisted that they must comply with existing securities laws.
Several Republican representatives accused Gensler of sabotaging the crypto business and called for his dismissal, while crypto firms like Coinbase started to openly consider relocation if the SEC
does not change its approach.
Here’s the resume of the conflict:
📌 For some reason, the SEC prefers regulating by enforcement instead of education. It has been asked many times to clarify different aspects of cryptoassets’ nature, registration requirements… to no avail other than an enforcement action, basically punishing a company for trying to comply;
📌 Yesterday’s hearing was convened to address these uncertainties, but the House Representatives didn’t get much information either;
📌 Rep. Patrick McHenry asked Gensler whether Ethereum was a security no less than 8 times. He did not get an answer;
📌 Rep. McHenry also raised concern that the situation when an asset is claimed to be a security by one regulator (the SEC), and a commodity – by another (the CFTC), does not serve the market or the investors;
📌To Gary Gensler, things seem simple: “They [the exchanges] are noncompliant generally, and they need to come into compliance.” The fact that the “come in and register” system does not work for crypto companies – some requirements are incompatible with crypto – does not bother Mr. Gensler at all;
📌 These and other considerations pushed Rep. Warren Davidson to accuse the SEC of abuse of power and introduce legislation to remove Gary Gensler from his position;
📌 On the day of the hearing, Coinbase launched an “Update the System” campaign across different media, and Messari’s Ryan Selkis promised to spearhead a $100m crypto lobbying effort;
📌 If the PR and lobbying don’t work out, Coinbase may have an escape route: its CEO Brian Armstrong, while speaking at the London Fintech Week, admitted that “anything is on the table, including relocation.”
It is now up to American politicians to decide whether their country needs crypto business and innovation 💁♂️