Lobbyists believe that the Commission should review all actions against companies in the digital asset sector taken with Gary Gensler

​Blockchain Association calls for the removal of the SEC’s chair from crypto regulation

30.06.2023 - 10:25


4 min

What’s new? Representatives of the Blockchain Association lobbying group Jake Chervinsky and Marisa Coppel have called on the Chair of the US Securities and Exchange Commission (SEC) Gary Gensler to recuse himself from participating in the cryptocurrency regulatory process. They believe that the head of the agency demonstrates a “clear bias” toward the industry. According to the group,Gensler’s statements declaring all cryptocurrencies except BTC to be securities show that he has not properly studied the information on the issue. “Chair Gensler’s goal is to make crypto illegal in America,” Chervinsky and Coppel said.

Blockchain Association’s letter

What else does the letter say? Gensler’s bias against the crypto industry is evidenced by the SEC’s recent enforcement action against the Coinbase exchange, taken despite its repeated requests for guidance for companies to operate in the industry.

The Commission has “abandoned its role as a rulemaking body” by failing to give the industry the clarity it needs regarding securities laws and how they apply to various products and services in the sector. Instead, the regulator decided to move to “enforcement overdrive,” the Blockchain Association noted.

“With such clear bias, and such dereliction of the basic tenets of due process, the agency cannot fairly supervise the digital assets industry,” Chervinsky and Coppel said.

The group’s representatives argue that the SEC’s decision to pursue enforcement proceedings against Coinbase demonstrates Gensler’s violation of due process. For example, the SEC sent a Wells notice to the exchange in March informing it of possible violations and its willingness to take enforcement action. As part of that procedure, the company should have an opportunity to respond to the allegations, after which the commissioners will determine by vote what further steps to take.

Despite this, Gensler prematurely recognized all cryptocurrencies except bitcoin as securities, contrary to the obligation of impartiality in deciding whether to initiate enforcement proceedings against the company, the lobbyists stressed

Representatives of the group said that Gensler cannot take a neutral position on the issue and that his actions in the Coinbase case violate due process. “Chair Gensler’s vote as to whether to bring an enforcement action is tainted with bias,” the Blockchain Association stressed.

Coinbase accuses the SEC of violating procedural rules

Coinbase accuses the SEC of violating procedural rules

The exchange also said that the cryptocurrencies it offers are not securities

Read further

In addition, lobbyists believe that the regulator should review all actions against crypto companies initiated with Gensler’s involvement. They allowed the possibility that projects facing pressure might want to raise their bias both with the SEC itself and in federal court.

Earlier, Republican congressmen Warren Davidson and Tom Emmer introduced a bill that would restructure the agency and remove Gensler. According to the politicians, the head of the regulator committed a “long series of abuses that have been permitted under the current SEC structure.”

In May, the US Chamber of Commerce also criticized the SEC’s actions for its “haphazard, enforcement-based approach” to regulating the crypto industry.

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