Securities and Exchange Commission (SEC) Chair Gary Gensler’s crusade against the crypto-asset industry has prompted political pushback. United States Representative Warren Davidson is the latest to retaliate.
The Ohio Representative said he is introducing legislation to remove Gensler as the SEC boss in a bid to “correct a long series of abuses.”
SEC’s ‘Unconstitutional Overreach’
The announcement comes after the SEC said that it would “modernize” the proposed redefinition of an “exchange” under the agency’s rules which could also encompass crypto market participants in decentralized finance (DeFi).
The SEC Chair stated that rule amendments could be advantageous to both investors as well as the markets since it would entail bringing certain brokers under the purview of additional regulatory scrutiny.
The focus will be on “modernizing” the concept of an “exchange,” which would be more closely referred to as a system that “brings together buyers and sellers of securities that offer the use of non-firm trading interest and provide another type of non-discretionary method.”
As such, the proposed amendments would require these systems to register as national securities exchanges or as broker-dealers and comply with Alternative Trading System (ATS) regulations. The SEC further added the commission’s current rules also cover DeFi.
Opposition
Gensler’s proposal and the subsequent announcement targeting DeFi are in the crosshairs of many crypto advocates who have raised concerns about the agency’s overreach. This prompted Coinbase’s legal chief, Paul Grewal, to go on to declare his intention to have Gensler ousted from his role for a continued crackdown.
United States Representative Warren Davidson also chimed in and tweeted,
“To correct a long series of abuses, I am introducing legislation that removes the Chairman of the Securities and Exchange Commission and replaces the role with an Executive Director that reports to the Board (where authority resides). Former Chairs of the SEC are ineligible”
Nonprofit blockchain advocacy group Coin Center also hit back at the SEC, deeming its approach as “unconstitutional.” On the regulatory front, the SEC boss found himself again under fire from Commissioner Hester Peirce, who filed a dissent against Gensler’s policy move.
DeFi Crackdown
The latest decision is far from the first salvo in the assault on DeFi. The sector is seeing relentless crackdown attempts, which industry advocates believe to be “extrajudicial” in nature. Last month, Sushi DAO and Head Chef Jared Grey were served with a subpoena by the SEC.
More recently, the US Treasury issued a first-of-its-kind illicit finance risk assessment report on DeFi.
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