Today, the top Rep. Patrick McHenry (NC-10) said Gary Gensler’s intentions to have more control over the crypto ecosystem were “a blatant power grab that will hurt American innovation.”
The battle to determine which will be the position of regulators towards the crypto industry is heating up in the United States. While some big-name politicians claim that the state has a duty to protect its citizens from the risks of an under-regulated industry, others equally influential claim that excessive regulation is driving investors away.
Rep. Patrick McHenry (R-NC) is in the latter group, and this week he made it clear again.
In an official statement posted on the House Financial Services Committee website, Patrick McHenry questioned SEC Chairman Gary Gensler’s recent interest in increasing his regulatory powers to exert more control over the cryptocurrency industry.
“Chairman Gensler’s latest move to ask Congress for jurisdiction over non-securities exchanges is a blatant power grab that will hurt American innovation,”
Rep. Patrick McHenry Thinks U.S. Needs Better Laws
A few days ago, Sen. Elizabeth Warren shared a letter written by Gary Gensler, asking for more power to regulate the cryptocurrency industry. In the text, Gensler assures that cryptocurrency investors are using platforms that are not “adequately protected” and argues that all centralized or decentralized exchanges should be regulated by the SEC.
“The world of crypto finance now has platforms where people can trade tokens and other venues where people can lend tokens. The American public is buying, selling, and lending crypto on these venues, both centralized and decentralized finance (“DeFi”) platforms. I believe these various platforms not only can implicate the securities laws; some platforms can also implicate the commodities laws and the banking laws.”
In the letter, Gensler also urges prioritizing regulation on crypto trading, lending, and DeFi. “Regulators would benefit from additional plenary authority to write rules for and attach guardrails to crypto trading and lending,” he said.
Patrick McHenry, however, is strongly against this approach, which he considers being far-fetched. McHenry argues that there are diverse areas to explore in the vast world of cryptocurrencies, and Gensler was wrong to try to generalize to overreach its consequences.
To address this point, in early 2021, he introduced H.R. 1602, the Eliminate Barriers to Innovation Act. This bill, which was passed by the House on April 20, proposes the creation of a joint task force between the SEC, the CFTC, and other stakeholders to design regulatory policies that best serve both national interests and those of entrepreneurs interested in investing in the development of the crypto ecosystem.
He asserted that clear, well-crafted policies could help promote innovation and economic growth in the country:
We need smart policy, made through a transparent process, to ensure innovation and job creation continue in the U.S. We don’t need another backroom deal between Gensler and Elizabeth Warren.”
U.S Regulators Are Not Being Too Crypto Friendly
Interest in cryptocurrencies has increased among politicians over the past few days. Unfortunately, it has not been good news for cryptocurrency enthusiasts.
Recently, The U.S. Senate passed the Infrastructure Bill proposed by President Joe Biden. In it, brokers are required to provide information about their users’ transactions. However, the law is so broad that the definition includes miners, Defi protocols, and other service providers.
The struggle to introduce an amendment that would exclude these players failed because of the obstacles that Senator Richard Shelby (R-AL) imposed, and the bill was passed unchanged for further discussion on the House.
If things keep going down this road, many companies and protocols will likely have to change their modus operandi… or country.