US lawmakers challenge crypto policies in heated hearing

SEC Chair Gary Gensler faced bipartisan criticism during a House hearing, with lawmakers accusing the agency of stifling the cryptocurrency industry. Gensler defended the SEC’s regulatory approach, but critics argued that unclear guidelines have caused confusion and slowed innovation.

US Congress

The US Securities and Exchange Commission (SEC) faced sharp bipartisan criticism during a House Financial Services Committee hearing, with lawmakers from both parties accusing the agency of hindering the growth of the cryptocurrency industry. SEC Chair Gary Gensler defended the agency’s stance, stating that existing securities laws are sufficient to regulate digital assets. However, critics, including Republican Commissioner Hester Peirce, argued that the SEC’s approach has created regulatory uncertainty, making it unclear which assets fall under the agency’s jurisdiction.

Gensler, who has described the crypto industry as plagued by criminality and non-compliance, stressed that regulation is based on the economic nature of assets, referencing Supreme Court rulings. The hearing, attended by all five SEC members, allowed both Republican and Democratic commissioners to voice differing views. Peirce, in particular, claimed that the SEC’s imprecise regulatory approach was negatively affecting crypto sales and innovation.

SEC Chair Gary Gensler also defended a 2022 SEC bulletin that requires public companies holding crypto assets to record them as liabilities, stating that a series of bankruptcies had justified this policy. As political pressure mounts ahead of the elections, Gensler hinted that the SEC may revisit corporate disclosure regulations on share buybacks, despite a recent court ruling against the agency’s previous efforts.