Several politicians have asked regulators to work with Congress on cryptocurrency regulation after the U.S. Court of Appeals for the District of Columbia Circuit decided in favour of crypto asset management Grayscale Investments against the U.S. Securities and Exchange Commission (SEC). The Financial Services GOP on Tuesday posted in this regard on the social media platform X, “Chair Gensler’s regulation by enforcement is unlawful and does nothing to protect consumers. It’s time for Biden’s regulators to work with Congress to provide clear rules of the road and robust consumer protections through legislation.” The consensus in this matter is apparent to the extent of the fact that multiple American lawmakers demand for Biden’s Regulators to work with Congress.
The collective need of the US Congress for Biden’s Regulators to work with Congress
The head of the House Committee on Financial Services, Congressman Patrick McHenry from the Republican Party of the State of North Carolina, wrote on X as well, commenting negatively on the work ethics of the current SEC lead, “SEC Chair Gary Gensler’s crusade against the digital asset ecosystem is falling apart under scrutiny from the courts.” In a recent lawsuit concerning the offers and purchases of XRP, a federal judge agreed with Ripple Labs over the securities regulator. The SEC has stated that it plans to challenge several aspects of the judgment.
It is to be duly noted that previously, in January of this year, four veteran U.S. officials in the Biden administration published a statement on Friday urging Congress to “step up its efforts” concerning regulating the cryptocurrency market.
The officials – Brian Deese, director of the National Economic Council; Arati Prabhakar, director of the White House Office of Science and Technology Policy; Cecilia Rouse, chair of the Council of Economic Advisors; and National Security Advisor Jake Sullivan – wrote that Congress “should expand regulators’ powers to prevent misuses of customers’ assets … and to mitigate conflicts of interest.”
Why the synergy is so important to all?
The SEC losing yet again an additional legal battle with cryptocurrency firms, according to McHenry, “is yet another example of why a comprehensive regulatory framework, like the FIT for the 21st Century Act, must be made law.” The crux of his urge lies in the proposition for Biden’s Regulators to work with Congress. The Financial Innovation and Technology (FIT) for the 21st Century Act (citation: H.R. 4763) was approved by the House Financial Services Committee and the House Committee on Agriculture in July.
In 2022, the Biden administration had urged Congress to enact rules outlining the proper regulation of cryptocurrencies, as officials have cautioned that any interruptions on Capitol Hill could endanger investors. Soon after, the US Financial Stability Oversight Council, which consists of the Treasury and other key financial regulators, released a report asking policymakers to reach a consensus on the issue of regulation of “bitcoin and other crypto assets sold on the spot market.”
The reports also recommended authorities provide guidelines and standards for hazards in the digital asset ecosystem, including the possibility for cryptocurrencies to be used in money laundering or fraud, from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
The White House had also stated that Biden will think about asking Congress to alter the Bank Secrecy Act (BSA) so that it covers platforms for non-fungible tokens, or NFTs, and cryptocurrency exchanges.
For approaching the strategy to oversight the cryptocurrency business with an enforcement-focused focus, the SEC and Chair Gary Gensler have come under fire. Congressman Frank Lucas of the Republican Party from the State of Oklahoma has assertively criticized the securities monitor and also Chairperson Gensler last week for approaching regulation carelessly. He firmly opines that Gary Gensler’s SEC is pursuing a reckless and hurried “rulemaking agenda” with poor economic analysis and scant public input – thereby endangering America’s financial system and capital markets.