A leaked memo featuring the United States Democrat lawmakers has caught the crypto sector by storm. In the memo, the lawmakers can be seen as supporting the Securities and Exchange Commission (SEC) in its war against crypto.
Eleanor Terrett, a Fox Business reporter, took to Twitter, to share the video which revealed the intent of the Democrat lawmakers. The lawmakers got down to several issues including funding for regulators and the classification of cryptocurrencies for legal purposes. The tweet quickly gained hundreds of retweets and thousands of likes.
The images pinned in the tweet feature the memorandum which affirms what many have long suspected about crypto’s relative popularity among the two major US political parties.
Importantly, the memo’s ostensible readership was for congressional Democrats sitting on the House Financial Services Committee. It also includes “key messages” for representatives to adhere to when engaging with the issue of crypto. One of the parts stated:
The problem isn’t ambiguity, it’s mass non-compliance with existing laws, and crypto companies can’t be let off the hook.
Notably, this view resembles that of Gary Gensler, the chief of SEC, wherein he blamed the crypto industry for non-compliance and rejected the requirement of a new regulation. Furthermore, the memo stated:
The US has a regulatory system that has worked well and sustained massive innovation in the financial system for decades. We can’t invent new accommodating regulatory structures simply because crypto companies refuse to follow clear rules of the road.
The memo appears to underscore partisan divisions among those charged with financial regulation. It suggests that crypto will become an even more partisan issue. Additionally, it suggests Democrats in Congress attack Republicans on multiple fronts including, hammering them on the funding of the Commodity Futures Trading Commission, and backing Gary Gensler’s classification of “nearly” all crypto assets as securities.
Gary Gensler is the current chair of the SEC and is renowned for having an antagonistic relationship with the industry. Another bullet point in the memo reads:
Both the SEC and CTFC are aligned on the fact that the SEC is the regulator to determine if crypto assets are securities. And the SEC has made clear that nearly all crypto assets are securities. End of story.
However, another clause encourages Democrats on the committee to praise Gensler for building the “strongest enforcement team yet.” Gensler and the SEC “must continue to lead the regulation of the U.S crypto market.”
The two primary regulators in the US have been in strife for a particularly long time to take over the regulation of the crypto sector. While the SEC has repeatedly labeled all crypto assets as securities except Bitcoin, CFTC has refuted this by presenting its counter theory and arguments.
Considering the political divide in the US, clearly, the Democratic Party has been the more crypto-skeptic of the two parties in the United States. Progressive senator Elizabeth Warren, in particular, has repeatedly called on regulators to be tougher with the industry. If the leaked memo is any indication, more of her party colleagues will be joining her.
On the other hand, Republican lawmakers have constantly stood up in favor of the crypto sector, and one of them also proposed to dismiss Gensler from his position. So far, the regulatory feud in the US has reached nowhere but it is important for the authorities to come together and discuss appropriate standards for regulation instead of outrightly rejecting it.