House Republicans Call on the SEC To Withdraw Proposed Rule That They Say Could Affect Decentralized Exchanges

Source: Adobe

A proposed Securities and Exchange Commission rule would shut down the growth of the digital asset business and needs to be withdrawn, House Republicans mentioned. 

A bunch of lawmakers in the House Financial Services Committee wrote to the SEC this week criticizing the proposed rule that they are saying may increase the definition of an alternate to incorporate “communication protocol systems” and will transcend centralized exchanges, the lawmakers mentioned. 

“For digital assets, the Proposed Rule would go well beyond regulating centralized digital asset platforms and apply to persons acting ‘in concert’ with each other,” the lawmakers mentioned. “This could capture a wide range of individuals in the digital asset ecosystem, including software developers and participants in a blockchain network’s consensus mechanism.”

The rule may additionally seize software program builders and people in a blockchain community’s consensus mechanism, they argued. 

Almost 30 lawmakers signed the letter together with House Financial Services Chair Patrick T. McHenry, French Hill, Tom Emmer and Warren Davidson. 

SEC Gensler’s private views

Lawmakers additionally accused SEC Chair Gary Gensler of “using this proposal to push his own personal views regarding digital assets.”

“Chair Gensler has previously made statements on his own behalf claiming that DeFi exchanges are essentially equivalent to traditional intermediaries in financial markets even if they call themselves something different,” they mentioned. 

The lawmakers additionally accused the SEC of “attempting to front-run Congress” after they themselves with the House Agriculture Committee are working on laws to manage digital property.

Leaders in each the House Financial Services Committee and the House Agriculture Committee have launched draft laws to manage crypto together with measures that will “classify cryptocurrencies as a security or a commodity and regulate exchanges, among other measures.”

McHenry mentioned throughout a listening to on Tuesday that he needs to carry a vote on that invoice by mid-July. 

“This is a draft bill,” he mentioned throughout that listening to. “There’s plenty of time for us members to find common ground on how we legislate here, but be advised I intend for this committee to markup some form of this legislation when we return from the July 4 recess.” 

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