Gary Gensler, the chair of the Securities and Exchange Commission (SEC), is facing the prospect of losing his job
The United States Representative Warren Davidson plans to introduce legislation to have him removed. Davidson, a crypto-friendly congressman, tweeted on April 15 that he will introduce legislation that removes the chairman of the SEC and replaces the role with an executive director that reports to the board.
Davidson claims that he is taking this action to correct a long series of abuses, citing the SEC’s announcement about revisiting the proposed redefinition of an “exchange” as the latest abuse. The congressman is proposing that former chairs of the SEC are ineligible for the new executive director role.
Gensler’s proposed rule amendments could benefit investors and markets by bringing certain brokers under additional regulatory scrutiny, as well as modernizing rules that define an exchange, according to the SEC chairman in an April 14 meeting.
Similar amendments were proposed in January 2022, and at that time, crypto advocacy groups suggested that 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 proposed rule amendments in an April 14 statement.
Peirce claimed that the SEC has been expanding its reach to solve problems that do not exist, unlike in the past when the SEC embraced new technology.
She argued that the SEC has been using enforcement actions to develop the law on a case-by-case basis rather than creating clear regulations. Peirce also accused the SEC of using the “notice-and-comment rulemaking process” as a threat.
The commissioner believes that a concept release should have been issued instead of proposing new rules to address concerns over the ambiguity and scope of the proposed changes and the SEC’s limited understanding of the space.
Congressman introducing legislation to fire SEC Gensler
The SEC has launched several high-profile actions against crypto companies such as Ripple, LBRY, and Coinbase over alleged violations.
The regulator has also taken aim at staking and stablecoins, prompting some critics to argue that the SEC has been using enforcement actions to develop the law on a case-by-case basis instead of creating clear regulations.
The proposed rule amendments are part of the SEC’s efforts to regulate the crypto industry more effectively. The debate surrounding these proposed amendments highlights the differing opinions about how best to regulate the crypto space.