Rep. Davidson will introduce legislation to fire SEC chief Gensler for crypto overreach
Securities and Exchange Commission (SEC) Chairman Gary Gensler could face unemployment after US Representative Warren Davidson declared he would introduce legislation to fire the SEC chief.
In a 15 April chirping in response to Coinbase’s chief legal officer, Paul Grewal, the crypto-friendly representative announced his intention to have Gensler removed from his role following the SEC’s latest announcement to revise the proposed redefinition of an “exchange.”
“To correct a long list of abuses, I am introducing legislation to remove the Chairman of the Securities and Exchange Commission and replace the role with a CEO who reports to the Board (where the authorities reside),” Davidson tweeted.
Yep. To correct a wide range of abuses, I am introducing legislation that would remove the chairman of the Securities and Exchange Commission and replace the role with an executive director who reports to the board (where the authorities reside). Former chairmen of the SEC are not eligible. https://t.co/VBnkgt8bhM
— Warren Davidson (@WarrenDavidson) 16 April 2023
“Former SEC chairmen are not eligible,” he added.
Gensler said in an April 14 meeting that the proposed rule changes could benefit investors and markets by bringing certain brokers under additional regulatory scrutiny as well as “modernizing” rules that define an exchange.
Similar changes were proposed in January 2022. At the time, crypto advocacy groups suggested it was an overreach of the SEC’s authority that could jeopardize participation in the space.
SEC Commissioner Hester Peirce, known as “Crypto Mom” for her pro-crypto positions, criticized the new proposed rule changes in a statement on April 14 declaring “stagnation, centralization, expulsion and extinction are the watchwords” for the latest move from the SEC.
“Instead of embracing the promise of new technology as we have done in the past, we propose here to embrace stagnation, force centralization, encourage the expulsion and welcome extinction of new technology,” Peirce said.
“That’s why I disagree,” she added.
In addition to ironing this t-shirt (which publishes code from a comment letter), do I need to register as a swap before wearing it? “It depends,” according to the SEC’s latest release: pic.twitter.com/xD7Lx2kJE6
— Hester Peirce (@HesterPeirce) 14 April 2023
According to Peirce, unlike in the past when the SEC embraced new technology, the modern regulator has expanded its reach to solve problems “that don’t exist.”
She further believed that the SEC has taken the approach of refusing to change current regulations to make room for new technology and new ways of doing business.
“Today’s commission is asking entrepreneurs who are trying to do new things in our markets to come in and register,” Peirce said.
“When entrepreneurs find they can’t, the Commission rejects the opportunity to make practical adjustments to our registration framework to help entrepreneurs register, and instead rewards their good faith with an enforcement action.”
Peirce also accused the SEC of using the “notice-and-comment rulemaking process” as a threat.
Related: The SEC will investigate companies that offer or advise on crypto
According to Peirce, because of the concerns over the ambiguity and scope of the new proposed rule changes and the SEC’s “limited understanding” of the space, a concept release should have been issued instead.
“I wish we had gone about it differently,” Peirce said.
Over the past few years, the SEC has launched more than a few high-profile actions against crypto companies such as Ripple, LBRY, and Coinbase over alleged violations.
It has also taken aim at staking and stablecoins, prompting some critics to argue that the SEC has used enforcement actions to develop the law on a case-by-case basis rather than creating clear rules.
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