In a recent interview, Congressman Tom Emmer severely bashed Gary Gensler, chairman of the Securities and Exchange Commission (SEC), for his approach to crypto regulation. He even went on to label him as a “bad faith regulator.”
Bad faith is a phrase used to describe an intent to deceive and in this context, the lawmaker is pointing out the regulator’s behavior of denying a claim without giving a reason.
Expressing his opinions at a podcast called “Unchained podcast,” which is hosted by a crypto-journalist on Friday, Tom Emmer did not shy away from using strong words against the regulator at all. In addition, he questioned Gensler’s supposed “open door policy,” which was to welcome firms to discuss the relevant issues that they are facing.
Questioning the scheme which was proposed by Gensler, the lawmaker said that the policy “might have an open door, but it is an enter-at-your-own-risk-door.” He added that the SEC has been blindly carrying an enforcement spree against the crypto community and in the process, he is missing out on the bad actors. Quoting him:
This guy in my mind is a bad-faith regulator. He’s been blindly spraying the crypto community with enforcement actions while completely missing the truly bad actors.
To illustrate his points, Emmer also referred to recent examples of enforcement actions carried out by the SEC. The lawmaker pointed to the case of Coinbase, which received a Wells Notice from the SEC for violating federal laws in March. He added that the crypto firm was actively trying to work with the agency by getting compliance feedback on staking products, among other things.
However, he said that despite several requests, Gary Gensler and his agency refused to engage with the feedback process and instead in return sent them a Wells Notice for the same points the firm had requested feedback for.
Despite several meetings over several months, Gary Gensler’s SEC refused to provide feedback. Instead, after all these meetings and nothing happening, the SEC slapped Coinbase with a Wells Notice regarding the very issues on which Coinbase was asking for their feedback.
In recent times, the regulator has been on an enforcement spree, and that has received major criticism from the larger crypto community. To this, Emmer said that this is not the way the government should be serving Americans, and he believes “Gary Gensler is not regulating in good faith.”
Ever Since Gensler took over his position as the chief of the SEC in 2021, he has repeatedly suggested that the agency has an amicable ‘open door policy’ and called on crypto firms to register with the SEC to maintain compliance with securities law. However, it is also a propagation of his view that nearly all crypto assets apart from Bitcoin (BTC) are classified as securities, and thus the sector should be regulated by the SEC.
Gensler’s authoritative regulation via enforcement approach has received severe criticism from lawmakers as well as industry experts. French Hill, a Republican lawmaker, and Daniel Seifert, Coinbase’s Vice President and Regional Managing Director in Europe, shared similar opinions on the topics. They both agreed on how the US securities regulator would be responsible for driving crypto innovation away.
Moreover, Hester Pierce, the commissioner of the SEC, also criticized the regulator’s antagonistic approach to cryptocurrencies. She said that the regulators can’t draft rules using enforcement actions. Additionally, the lawmakers have also summoned the SEC chief to appear before them and give clarifications regarding their crypto regulation approach on April 18.