Later today, the House Financial Services Committee will hold an oversight hearing regarding the Securities and Exchange Commission with Chair Gary Gensler testifying on his leadership of the Commission. In the hours before the scheduled start of the hearing, Committee Republicans have posted a letter hammering Gensler on his “misrepresentation of non-existent digital asset trading platform registration process.”
Since Gensler has assumed the helm of the Commission, he has frequently invited crypto exchanges or digital asset trading platforms to come in and register their marketplaces. At the same time, certain industry participants have refuted this option as fake.
The letter states:
“To date, the SEC has forced digital asset market participants into regulatory frameworks that are neither compatible with the underlying technology nor applicable because the firms’ activities do not involve an offering of securities. Both approaches hamper the digital asset ecosystem’s ability to realize the unique benefits the new technology offers, which harms consumers, investors, and the economy as a whole.
As Chair, you have acknowledged that digital asset trading platforms do not perfectly fit under existing laws and regulations. You have been outspoken in your push for digital asset trading platforms to ‘come in and register’ under the national securities exchange (NSE) framework. Yet, at the same time, you have failed to provide a path that allows digital asset trading platforms to register. As you know, many digital assets are developed for the purpose of being used within a developing system, are capable of being used in non-securities transactions, and are meant to be consumed and used in the protocol for which it was designed. Existing regulations under the NSE framework do not contemplate these features.”
The Representatives describe Gensler’s proposition for digital asset platforms as a “willful misrepresentation,” adding that the SEC has not been clear as to when a digital asset is a security and when it is not. Gensler has frequently stated that nearly all digital assets are securities – reiterating this claim in his prepared testimony for the hearing.
The hearing is scheduled to commence at 10 AM ET today (April 18, 2023).