Rep. Patrick McHenry questioned SEC Chairman Gary Gensler’s apparent interest in expanding his regulatory powers to impose greater control over the cryptocurrency business, according to an official statement posted on the House Financial Services Committee website.
In the United States, the struggle to decide whether regulators will take a stance on the cryptocurrency business is heating up. While some well-known politicians argue that the government has a responsibility to safeguard individuals from the dangers of an unregulated sector, others argue that excessive regulation is scaring away investment. Republican Leader McHenry stated,
Chairman Gensler’s latest move to ask Congress for jurisdiction over non-securities exchanges is a blatant power grab that will hurt American innovation
On August 5th, 2021, Sen. Elizabeth Warren highlighted Gary Gensler’s letter, in which he asks for additional power to oversee the cryptocurrency sector. In the paper, Gensler claims that crypto investors are utilizing vulnerable platforms and urges that the SEC should oversee all centralized and decentralized exchanges.
The American public is buying, selling, and lending crypto on these venues, both centralized and decentralized finance (“DeFi”) platforms. I believe these various platforms not only can implicate the securities laws; but some platforms can also implicate the commodities laws and banking laws. This raises a number of issues related to protecting investors and consumers, guarding against illicit activity, and ensuring financial stability
Patrick McHenry, on the other hand, is adamantly opposed to this strategy, which he believes is unrealistic. McHenry claims that there are many different areas to investigate in the broad realm of cryptocurrencies and that Gensler was mistaken in trying to generalize to the point of overreaching its implications.
H.R. 1602, the Eliminate Barriers to Innovation Act, was proposed in early 2021 to address this issue by McHenry. This bill, which was passed by the House on April 20, proposes the formation of a joint task force comprised of the SEC, the CFTC, and stakeholders to develop regulatory policies that best serve both national interests and the interests of entrepreneurs interested in investing in the development of the crypto ecosystem.
Politicians interest in cryptocurrency has risen in recent times. Unfortunately, the news has not been positive for cryptocurrency investors. Because of the roadblocks established by Senator Richard Shelby, the effort to offer an amendment that would exclude these players failed. If things continue along this path, many businesses and protocols will be forced to modify their business models.