Crypto Leaders and Congress Blast SEC Over Crypto Regulations

• Several members of Congress and crypto executives have met to address the issue of cryptocurrency regulation in the US.
• Gary Gensler’s leadership has come under scrutiny as Congress overreaches in its approach to the crypto industry.
• The US has turned into a “no-fly zone,” said Michael Liftik.

In a Wednesday meeting, several crypto leaders and members of congress debunked the Securities and Exchange Commission’s (SEC) strict regulatory approach to the crypto industry.

Tensions are simmering as crypto leaders voice their displeasure with SEC regulations

The regulatory battle between the SEC and the crypto industry was one of the major headlines on Wednesday as industry leaders met with Congress to discuss.

Congressmen Wiley Nickel and Ritchie Torres, among others, were in attendance to discuss the SEC’s regulatory framework for cryptocurrencies under Gensler.

Torres, in his speech, recalled an interview in which he asked Gary Gensler about tokenizing a Pokémon book. He stated that Gensler’s response demonstrated his insecurity about any form of decentralization. The question seemed related to the recent SEC notice Wells issued on the OpenSea NFT market last month.

Congressman Wiley Nickel also called Gensler’s approach “wrong.” Nickel suggests the regulations “hurt consumers, innovation, American competitiveness and Democratic governance.”

He also points to the signing of the FIT21 bill in May 2024 for proper crypto regulations. The regulator’s refusal to comply with Congress to advocate for better regulations has been called “hostile” and “irrational.”

Representatives of the cryptography industry present at the meeting also spoke. Robinhood’s chief legal officer, Dan Gallagher, spoke of the difficulty of achieving exact compliance with the currently unclear regulatory framework.

Michael Liftik, a former SEC employee and partner at the law firm Quinn Emanuel Urquhart and Sullivan, also spoke out against the “regulation by enforcement” approach that characterized Gensler’s leadership. He goes on to address the effect of rigid regulations on US innovation.

“Instead of being an epicenter of financial innovation, as it should be and as it is in other contexts, the US has turned into a crypto ‘no-fly zone’.

As Gensler’s term draws to a close, several members of the crypto industry are anticipating a change in the regulatory structure, eyeing a potential change if Republican nominee Donald Trump secures a win.

Meanwhile, the SEC reached a settlement with DeFi platform Rari Capital after the latter agreed to several sanctions, including “permanent bans, conduct-based injunctions, civil penalties, disgorgement with prejudgment interest, and equitable injunctions of officer and director against co-founders for a period of five years”.

“We allege that Rari Capital and its co-founders misled investors about both the features and profitability of certain crypto-asset investments offered by Rari Capital and acted as unregistered brokers,” said Monique C. Winkler, director of the San Francisco Regional SEC. Office, in a press release.

Bitcoin is trading around $62,000 at the time of writing, up more than 3% on the day.