The cryptocurrency industry’s treatment by the United States Securities and Exchange Commission (SEC) and its Chairman, Gary Gensler, has come under intense scrutiny and criticism from various quarters, including American politicians.
One prominent figure voicing discontent is United States Representative Warren Davidson, who expressed concerns when the SEC introduced new rules aimed at modernizing the concept of an “exchange.” He argued that the agency’s repeated actions against the crypto sector amounted to a series of abuses. Davidson even took the step of proposing legislation to remove Gary Gensler from his position as the Chair of the SEC.
Adding to the chorus of criticism, Senator Cynthia Lummis, a staunch supporter of bitcoin and a HODLer herself, criticized the SEC for failing to provide clear guidance on distinguishing securities from commodities in the crypto market. She also condemned the absence of comprehensive crypto regulations in the USA, fearing it might drive the industry offshore or underground.
In mid-June, when major financial players like BlackRock sought approval for a spot Bitcoin ETF in the US, the SEC initially showed reluctance, deeming the applications inadequate. In response, US Congressman Patrick McHenry accused Gensler of aiming to stifle crypto in the country.
One significant event that shook the crypto space was Ripple’s recent court victory against the SEC. A judge ruled in mid-July that most XRP sales did not qualify as securities transactions, which the SEC had alleged years ago. Representative Ritchie Torres called out the lack of clear guidance from the SEC on crypto assets after Ripple’s win and questioned whether the agency would relent in its regulatory crackdown.
Senator Lummis also emphasized the need for Congress to establish a regulatory framework for crypto assets following the outcome of the Ripple vs. SEC legal battle. She and Senator Kirsten Gillibrand introduced a bill aimed at categorizing most digital currencies as commodities.
Finally, US Representative Dusty Johnson criticized Gensler’s assertive stance on digital assets, which was tested by the Ripple case’s outcome. Johnson argued that the ruling undermined Gensler’s approach and created further confusion. He proposed that Congress must step in and pass crypto-specific legislation to address these issues definitively.
