The SEC must act against the regulatory overreach

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The SEC must act against the regulatory overreach

Blockchain technology and digital assets offer a distinct opportunity for the world economy not seen since the invention of the internet. These solutions open doors for the unbanked, providing a path for success to those who are not part of traditional financial systems.

Despite the surge in blockchain technology and digital assets, bureaucrats like Gary Gensler, the Chairman of the SEC, aim to hinder their progress in the United States through illegal, overbearing regulations based on a misguided approach that lacks comprehension of their potential. Fortunately, the courts have slapped Gensler's attempts to drive digital assets out of the U.S. economy. Now Congress must act to keep Gensler and the SEC at bay.

Gensler intends to take his authority to regulate 'as far as [it] goes, while saving 'transactions, products, and platforms from falling between the regulatory cracks,' according to his remarks at the 2021 Aspen Security Forum. Gensler, who is launching his latest attempt at unauthorized bureaucratic overreach, aims to regulate American digital asset firms out of existence.

Why does Gensler deny progress and innovation in digital assets? The embarrassment caused by Gensler's inability to prevent Sam Bankman-Fried and FTX from committing one of the largest fraud schemes in U.S. history.

U.S. Rep. Ritchie Torres labeled Gensler as 'persistently responsible' for failing to uncover Sam Bankman-Fried's fraudulent FTX cryptocurrency exchange in 2022. Gensler was asleep at the switch and failed to assert SEC oversight before it was too late in the FTX case. Gensler's solution is to execute a personal vendetta against law-abiding citizens within the industry, with the intent of retaliating against one of the nation's worst actors. Gensler's plan is to impose rules so severe that digital asset firms leave America and move their operations overseas.

The federal appeals court for the District of Columbia ruled in his latest defeat against the SEC in their attempt to prevent Grayscale Investments from turning their Grayscale Bitcoin Trust into a listed Bitcoin exchange-traded fund. In the decision, Judge Neomi Reo directed Grayscale's request to review be granted and the SEC's order to deny the GBTC listing application to be vacated, saying that the SEC did not offer any explanation as to what Grayscale had done wrong. Despite the victory, there are no signs that Gensler and the SEC will retreat from their crusade.

Congress must act quickly to thwart any new regulatory attempts in the future. Thankfully, House Majority Whip Tom Emmer has taken thehelm in these efforts to combat Gensler and the SEC by introducing an amendment to the Financial Services and General Government appropriations bill. If enacted, this rider would prohibit the SEC from using taxpayer dollars for illegal enforcement actions against digital assets without clear legal authority.

The Blockchain Innovation Project, a bipartisan advocating group aimed at educating elected officials on digital assets and blockchain technology, supports the adoption of this rider. At a time when many Americans can hardly negotiate a consensus on anything, Republicans and Democrats can agree that the overbearing nature of Gensler's SEC is unacceptable.

The value of digital assets is not going away. Americans can take advantage of these assets, offering us an unique chance to expand our economy and build wealth. The US is going to fall behind our rivals in the world market if the SEC imposes crippling regulations on the industry. Individuals, not government, should have the liberty to develop, grow, and manage their own financial assets. We must intervene and create clear guidelines for this promising industry that prevent actors like Chairman Gensler from crushing industries due to a personal grudge.