It seems proceedings may soon become even more complex within the U.S. Securities and Exchange Commission (SEC) crypto crackdown. Because today, June 12, House Republicans have begun pushing for significant restructuring of the regulatory body.
Last week, the SEC filed civil lawsuits against Binance and Coinbase, citing investor protection failures and customer fund mismanagement. Amidst this landscape, Congressman Warren Davidson of Ohio and House Majority Whip Tom Emmer of Minnesota introduced the “SEC Stabilization Act,” which calls for the removal of the current SEC Chairman, Gary Gensler.
SEC Stabilization Act
The two GOP lawmakers are accusing Gensler of a series of abuses under the existing SEC structure and calling for significant changes to protect the U.S. capital markets. Davidson explained the intention behind the legislation via Twitter, stating, “It’s time for real reform and to fire Gary Gensler as Chair of the SEC. U.S. capital markets must be protected from a tyrannical Chairman, including the current one.”
The proposed legislation would redistribute power from the chair to other commissioners, create an executive director position to manage daily operations, and add a sixth commissioner to the regulatory body. Davidson and Emmer say they have designed these changes to offer clear, consistent oversight to investors and the industry, distancing from what they term “political gamesmanship.”
“American investors and industry deserve clear and consistent oversight, not political gamesmanship,” Emmer stated via Davidson’s Twitter thread. “The SEC Stabilization Act will make common-sense changes to ensure that the SEC’s priorities are with the investors they are charged to protect and not the whims of its reckless Chair.”
🚨 NEWS – Today I filed the SEC Stabilization Act to restructure the @SECGov and #FireGaryGensler.— Warren Davidson 🇺🇸 (@WarrenDavidson) June 12, 2023
U.S. capital markets must be protected from a tyrannical Chairman, including the current one. It’s time for real reform and to fire @GaryGensler as Chair of the SEC. Statement ⬇️ pic.twitter.com/0VUHxUAhtB
The #SECStabilizationAct explained ⤵️— Warren Davidson 🇺🇸 (@WarrenDavidson) June 12, 2023
❌ Fires Chair @GaryGensler
✅ All rulemaking, enforcement, & investigations conducted by 6 commissioners
➕ Creates ED Role for day-to-day operations
Thank you, @GOPMajorityWhip for helping lead this legislation. pic.twitter.com/QFEHePJh1h
The bill also imposes limits on political control of the SEC, prohibiting any single political party from controlling more than three seats on the commission. Moreover, commissioners would retain rulemaking, investigative, and enforcement authority and would serve staggered six-year terms, much like the Federal Elections Commission (FEC).
While the bill doesn’t explicitly mention cryptocurrency, both Davidson and Emmer have been known to be pro-crypto and NFTs. Davidson serves as the vice-chair of the House Financial Services Committee’s new Subcommittee on Digital Assets, Financial Technology, and Inclusion, while Emmer has previously criticized Gensler’s leadership in the SEC.
This proposed legislation has arrived at a time when Gensler has shown an increasingly dismissive attitude toward cryptocurrencies. This stance, coupled with the SEC’s heightened scrutiny, has caused friction within the regulatory body and the wider market.
Whether the SEC Stabilization Act garners enough support to pass into law remains uncertain. However, the proposed bill highlights an emerging rift between crypto proponents and traditional regulators.
As the crypto industry continues to evolve, the question of how to best regulate these digital assets will remain a contentious and critical issue in the financial world. The SEC Stabilization Act marks a significant attempt to address these concerns and offers a new direction for the SEC amidst the growing importance of digital assets.
Editor’s note: This article was written by an nft now staff member in collaboration with OpenAI’s GPT-4.