Democrats continue to secretly push their war on the US crypto industry. Ahead of yesterday’s House Financial Services Committee hearing on digital assets, titled “The Future of Digital Assets: Measuring Regulatory Gaps in Digital Asset Markets,” a memo was distributed to Democratic committee members revealing the agenda.
The memo was leaked by Eleanor Terrett of Fox Business. It contained “key messages” for Democratic committee members to follow. The party leadership’s stipulations make it clear that U.S. Democrats want to bring the industry under their full control, with SEC Chairman Gary Gensler at the forefront.
Among other things, key statements in the memo include that Republicans claim they want to provide clarity in the markets by giving the CFTC space for cryptocurrencies, but instead they are simultaneously “undermining” the agency and harming it by proposing to cut its budget. Republicans on the committee reportedly plan to try to pass crypto-friendly legislation before the end of June.
U.S. Democrats Back Gensler In War On Crypto
In the memo’s other messages, it becomes clear that SEC chair Gary Gensler is the general of the war. Committee members were told to praise Gensler for “building the strongest enforcement team yet” to “crack down on crypto criminals and protect investors and consumers from harm.”
Unfortunately, Committee Republicans want to reverse course and tie the hands of the SEC. The SEC must continue to lead the regulation of the U.S. crypto market.
Further, Democratic committee members were directed to deny a “turf war” because “no one is fighting.” According to the memo, both the SEC and the CFTC agree that the SEC is the regulator that determines whether cryptocurrencies are securities. And the SEC has made it clear in the past that “almost all crypto-assets are securities. End of story.”
Further, the memo states that regulatory ambiguity is not the problem, “but rather mass non-compliance with existing laws,” adding: “We cannot invent new, accommodating regulatory structures simply because crypto companies refuse to play by clear rules.”
US Republicans Ramp Up Pressure On SEC
As U.S. Democrats push the war on crypto, U.S. Republicans are defending the industry. On Tuesday, Patrick McHenry, chairman of the House Financial Services Committee, and Bill Huizenga, chairman of the Subcommittee on Oversight and Investigations, penned a joint letter to Gensler demanding his agency release internal documents as well as communications with Sam Bankman-Fried.
The @SECGov‘s regulation by enforcement regime is pushing innovation in the digital asset ecosystem overseas, threatening American competitiveness.
Republicans will provide regulatory clarity for digital assets to preserve this technology and its potential here in the U.S. pic.twitter.com/c4MezMHDKb
— Financial Services GOP (@FinancialCmte) May 10, 2023
Republicans believe Gensler has failed to live up to the regulator’s duties while politicizing an agency that is supposed to protect investors from scammers. Remarkably, U.S. President Biden caused an uproar in the community just yesterday when he called for the closure of $18 billion in tax loopholes.
At press time, the total market cap stood at 1,109 trillion, bouncing off key support yesterday.
Featured image from iStock, chart from TradingView.com