Regulation
SEC Chairman Gary Gensler criticizes FIT2I ahead of House vote
Last updated: May 22, 2024, 10:59 a.m. EDT | 2 minutes of reading
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler issued a statement Wednesday morning criticizing the Financial Innovation and Technology for the 21st Century Act (FIT21) ahead of a planned vote on the regulations cryptography in the House today.
SEC Chairman Gary Gensler pushes back on FIT21 ahead of House vote
In a blog article published on the SEC website On Wednesday, Gensler claimed the bill would “in part create new regulatory loopholes and undermine decades of precedent for oversight of investment contracts,” “ultimately exposing investors and capital markets to immeasurable risks.” .
In particular, the federal regulator argued that FIT21 would run afoul of already established securities law by overturning the long-accepted Howey test while waiving current investment contract regulations, allowing operators cryptography companies to “self-certify” their products.
“The crypto industry’s record of failure, fraud, and bankruptcy is not because we don’t have rules or because the rules aren’t clear. This is because many in the crypto industry are not playing by the rules,” Gensler continued.
“We should make the political choice to protect the investing public rather than facilitate the business models of non-compliant companies. »
Crypto regulations finally see traction on Capitol Hill
Gensler’s comment comes amid a wave of momentum for crypto regulation on Capitol Hill, signaling potential reluctance among U.S. lawmakers toward the SEC’s current moves. regulatory regime towards digital assets.
Earlier this month, both chambers of Congress passed a resolution This would effectively overturn the SEC’s controversial crypto accounting guidance, known as SAB121.
In a statement shortly after the vote disavowing SAB121, pro-crypto Sen. Cynthia Lummis (R-WY) claimed it was “a victory for financial innovation and a clear rebuke of the How the Biden Admin and Gary Gensler Persecuted Crypto.”
Gensler has long ruffled the feathers of key players in the industry. crypto spacethe federal agency bringing a series of litigation cases against digital asset organizations for allegedly violating U.S. securities law.
Meanwhile, Ripple’s chief legal officer Stuart Alderoty, the blockchain company currently engaged in a contentious legal battle with the SEC over the sale of the XRP cryptocurrency, spoke to X early Wednesday to criticize the leadership of the SEC by Gensler.
Gensler overplayed his hand. He thought crypto was an easy target. He loved being the guy everyone loved to hate. He thought he was above Congressional oversight. All that is gone. He now constitutes a political liability in difficulty. https://t.co/Uy6Mwed6hJ
–Stuart Alderoty (@s_alderoty) May 22, 2024
“Gensler overplayed his hand. He thought crypto was an easy target,” Alderoty wrote. “He loved being the guy everyone loved to hate. He thought he was above Congressional oversight. All that is gone. He now constitutes a political liability in difficulty.”
If US lawmakers move forward with FIT21, it would mark the US government’s first successful attempt at a crypto regulatory framework and a strong rebuke of Gensler’s treatment of digital assets.