In a bipartisan letter submitted by Minnesota Republican Congressman Tom Emmer, a group of congressmen have written to Securities and Exchange Commission (SEC) Chairman Gary Gensler, challenging the regulator’s scrutiny of crypto companies and expressing concern. by the fact that an “overloaded” investigation may be suffocating the cryptocurrency sector.
They suggest that the SEC is drowning companies in paperwork, contravening the stated goals of the SEC and its jurisdiction.
Emmer tweeted to her 51,000 followers:
“My office has received numerous tips from crypto and blockchain firms that SEC Chair @GaryGensler‘s information reporting ‘requests’ to the crypto community are overburdensome, don’t feel particularly… voluntary… and are stifling innovation.”
This is why I sent a bipartisan letter today to the SEC Chair @GaryGensler with @RepDarrenSoto, @WarrenDavidson, @RepAuchincloss, @RepDonaldsPress, @RepJoshG, @RepTedBuddand @RepRitchie regarding the SEC’s crypto information seeking process. pic.twitter.com/8HcTgZA0XL
— Tom Emmer (@RepTomEmmer) March 16, 2022
“My office has received numerous tips from cryptocurrency and blockchain firms that SEC Chairman @GaryGensler’s ‘requests’ for information reporting to the cryptocurrency community are overly burdensome, not particularly felt… volunteers…and they’re stifling innovation.
This is why I sent a bipartisan letter today to SEC Chairman @GaryGensler with @RepDarrenSoto, @WarrenDavidson, @RepAuchincloss, @RepDonaldsPress, @RepJoshG, @RepTedBudd, and @RepRitchie regarding the process of seeking information on SEC cryptocurrencies.
In the letter, which was signed by four Democrats and three Republicans, all of whom are members of the bipartisan Congressional Blockchain Caucus, Emmer claims that the Gary Gensler-led SEC is abusing its investigative powers and overburdening crypto firms. – stating that the regulator has been using the authorities’ Enforcement Division and Examination Division to unfairly bog down cryptocurrency and blockchain companies in excessive paperwork.
Lawmakers believe the regulator has been misusing these divisions and pointed to limitations on the SEC’s mandated jurisdiction,
“There appears to have been a recent trend of employing the investigation functions of the Enforcement Division to collect information from unregulated cryptocurrency and blockchain industry participants in a manner inconsistent with the Commission’s rules for initiating investigations.”
Congressmen believe that the SEC could be violating the Paperwork Reduction Act (PRA) of 1980, which regulates the volume of paperwork that any individual or private entity needs to provide to a federal agency.
Collins Belton, managing partner of emerging technology law firm Brookwood, praised Emmer’s work on Twitter, saying the letter’s requests “will not put the commission in a good light.”
This is actually an interesting move I wasn’t expecting, clearly some of y’all in DC have gone to work. The requests in the letter are particularly on point and will *not* paint the commission in a good light imo, and that’s solely off of the requests I’m personally aware of. https://t.co/ElguJ77sEa
—Collins Belton (@collins_belton) March 16, 2022
This is an interesting move that I wasn’t expecting, clearly some of you at DC have gone to work. The petitions in the letter are particularly precise and do not give a good image of the commission, and that is only for the petitions that I am personally aware of.
belton too shared that he was “really glad” that the issues raised by Emmer and the other members of Congress came to light, as legal privilege had made it difficult for him to publicly express his concerns about the SEC.
“I haven’t been able to speak in public as much as I’d like to because of privilege issues, but with the responses to some of them, I think the public will see how absurdly broad some of these requests have been.”
Emmer has been a strong supporter of blockchain technology and cryptocurrencies in the past, introducing the Security Clarity Act in July 2021, which aimed to provide a clear legal definition for digital assets. Emmer hopes that the bill will allow blockchain entrepreneurs to distribute their assets without fear of any additional regulatory burden, after fulfilling the requirements laid out in the bill. The bill is still in its presentation phase and must still pass through the House of Representatives.
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