Coinbase CEO Brian Armstrong has urged Congress to intervene in the Securities and Exchange Commission’s (SEC) approach to crypto regulation.
In an April 21 tweet, Armstrong said it is “important for regulators to set policy and THEN enforce it. Not start with enforcement before there are clear rules.”
He argued that U.S. lawmakers may need to reign in the SEC to prevent the country’s crypto space from falling behind. The tweet stated:
“At this point seems like Congress will need to step in.”
The Coinbase CEO’s call for Congress’ intervention came after he met with the SEC. Before the meeting, Armstrong said the financial regulator had caused untold harm to America with its regulation-by-enforcement approach.
SEC Action Affects the Crypto Industry
The SEC’s approach to the crypto industry has pushed several firms outside of the United States. For example, three crypto exchanges, Beaxy, Paxful, and Bittrex, have recently halted operations because of the regulatory situation.
Besides that, the Commission has filed charges against firms like Gemini. Armstrong’s comments about regulation by enforcement come as the SEC and hinted that it could take action against Coinbase. The SEC previously fined Kraken $30 million over its staking product.
Meanwhile, its broad classification of crypto assets like XRP and Algorand as securities have complicated a long-running debate over the treatment of crypto assets under U.S. law.
US Lawmakers Target SEC
Alongside the Coinbase CEO, several U.S. lawmakers have criticized the SEC’s approach to crypto regulation Chair Gary Gensler. Congressman Tom Emmer described the SEC’s chair as an “incompetent cop on the beat.” He accused Gensler of overseeing several major fraud events that shook the industry.
According to Emmer, the SEC’s regulatory style lacks flexibility and nuance. He also argued that it pushes crypto firms “into the hands of the Chinese Communist Party.”
Meanwhile, Congressman Warren Davidson (R-OH) wants to introduce legislation that removes the SEC chairman. Davidson said:
“To correct a long series of abuses, I am introducing legislation that removes the Chairman of the Securities and Exchange Commission and replaces the role with an Executive Director that reports to the Board, where all authority resides. Former Chairs of the SEC will be considered ineligible.”
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