US congressmen want Gensler out for overprotective crypto rules

Rep. Davidson plans to file legislation dismissing SEC chairman Gensler for overreaching his authority over cryptocurrency.

The member of Congress in the United States proposed legislation to remove Gary Gensler from his position as head of the SEC. After the announcement, the US House of Representatives member Warren Davidson also said that Gensler might soon find himself out of a job.

In a tweet sent on April 15, in response to Coinbase’s legal head, Paul Grewal, the crypto-friendly congressman revealed his desire to remove Gensler from his post due to the SEC’s most recent pronouncement about reconsidering the proposed interpretation of an “exchange.”

Davidson, who asserted that former SEC chairs were incompatible, believes this will help correct a long series of authority abuses. 

During a meeting on April 14, Gensler said that the proposed rule revisions might benefit investors and markets by modernizing standards that define an exchange and placing some brokers under more regulatory scrutiny.

In January 2022, adjustments similar to those suggested were discussed. At the time, crypto advocacy organizations said it was an abuse of the SEC’s jurisdiction that may jeopardize people’s ability to participate in the space.

SEC commissioner Hester Peirce, known as Crypto Mom for supporting cryptocurrency, stated on April 14 that she blasted the newly proposed rule revisions. Peirce said that “stagnation, centralization, expatriation, and extinction are the watchwords” of the newest action by the SEC.

She went on to express the opinion that the SEC has taken the stance of refusing to change the rules now in place to make space for new technology and new methods of doing business.

Peirce further said that the SEC threatened to utilize the “notice-and-comment rulemaking process” against them.

Pierce believes a concept release should have been produced instead of the new proposed rule changes due to concerns over the vagueness and extent of the proposed rule changes and the SEC’s “limited understanding” of the sector.

Over the last several years, the SEC has brought many high-profile proceedings against cryptocurrency businesses, including Ripple, LBRY, and Coinbase, for alleged breaches of securities laws.

It has also aimed staking and stablecoins, which has prompted some detractors to suggest that the SEC has been using enforcement actions to build the law on a case-by-case basis rather than developing clear rules.