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âOverburdensomeâ â Eight members of Congress have expressed concern that Gary Genslerâs scrutiny of crypto firms is unfairly suffocating the industry.
In a bipartisan letter put forward by Republican Minnesota Congressman Tom Emmer, a cohort of Congress members has written to United States Securities and Exchange Commission (SEC) Chairman Gary Gensler to challenge the regulatorâs scrutiny of cryptocurrency firms and express concern that an âoverburdensomeâ investigation may be suffocating the crypto industry.Â
They suggest that the SEC is drowning companies in paperwork in contravention of the SECâs stated aims and mandated jurisdiction.
Emmer tweeted to his 51,000 followers:
âMy office has received numerous tips from crypto and blockchain firms that SEC Chair @GaryGenslerâs information reporting ârequestsâ to the crypto community are overburdensome, donât feel particularly⊠voluntary⊠and are stifling innovation.â
This is why I sent a bipartisan letter today to SEC Chair @GaryGensler with @RepDarrenSoto, @WarrenDavidson, @RepAuchincloss, @RepDonaldsPress, @RepJoshG, @RepTedBudd, and @RepRitchie regarding the SECâs crypto information seeking process. pic.twitter.com/8HcTgZA0XL
â Tom Emmer (@RepTomEmmer) March 16, 2022
In the letter, which was co-signed by four Democrats and three Republicans, all of whom are members of the bipartisan Congressional Blockchain Caucus, Emmer asserts that the Gary Gensler-led SEC is abusing its investigative powers and overburdening crypto firms. It claims that the regulator has been using the Division of Enforcement and Division of Examination authorities to unfairly bog down crypto and blockchain companies in excessive paperwork.
The legislators believe the regulator has been misusing these divisions and pointed out limitations in the SECâs mandated jurisdiction,
âIt appears there has been a recent trend towards employing the Enforcement Divisionâs investigative functions to gather information from unregulated cryptocurrency and blockchain industry participants in a manner inconsistent with the Commissionâs standards for initiating investigations.â
The Congress members believe that the SEC could be violating the Paperwork Reduction Act (PRA) of 1980, which regulates the volume of paperwork that any individual or private entity needs to provide to a federal agency.
Managing partner at emerging technologies legal firm Brookwood, Collins Belton lauded Emmerâs work on Twitter, saying that the requests in the letter âwill not paint the commission in a good light.â
This is actually an interesting move I wasnât expecting, clearly some of yâall in DC have gone to work. The requests in the letter are particularly on point and will *not* paint the commission in a good light imo, and thatâs solely off of the requests Iâm personally aware of. https://t.co/ElguJ77sEa
â Collins Belton (@collins_belton) March 16, 2022
Belton also shared that he was âreally gladâ that the issues raised by Emmer and the other Congress members were coming to light, as legal privilege had made it difficult for him to express concerns about the SEC publicly.
âI havenât been able to discuss much in public as much as I would like to due to privilege issues, but with answers to some of these, I think the public will see just how absurdly broad some of these requests have been.â
Related: Motions denied for both SEC and Ripple as battle continues
Emmer has been a staunch defender of blockchain technology and cryptocurrency in the past, introducing the Security Clarity Act in July 2021, which aimed to provide a clear legal definition for digital assets. Emmer hopes that the bill will allow blockchain entrepreneurs to distribute their assets without fear of any additional regulatory burdens after meeting the requirements set out in the bill. The bill is still in its introduction phase and is yet to pass through the House of Representatives.
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