SEC and CFTC in Power Struggle, Lawmakers Urge: Don't Hinder Cryptocurrency Development

U.S. Representatives Patrick McHenry and Glenn Thompson wrote a letter to Securities and Exchange Commission (SEC) Chairman Gary Gensler expressing concerns over Gensler's recent public statement alleging that the vast majority of cryptocurrencies and initial coin offerings (ICOs) violate U.S. securities laws.

U.S. Representatives Patrick McHenry and Glenn Thompson wrote a letter to Securities and Exchange Commission (SEC) Chairman Gary Gensler expressing concerns over Gensler's recent public statements alleging that the majority of cryptocurrencies and initial coin offerings (ICOs) violate U.S. securities laws.

In the letter, the two congressmen wrote:

"Our goal should not be to regulate the nation's innovation and job creation, but to facilitate constructive dialogue between regulators and the market. That is the objective."

Patrick McHenry and Glenn Thompson believe that Gensler's recent comments on enhancing crypto regulation, as well as a letter Gensler sent to Senator Elizabeth Warren indicating that the SEC may need more authority to regulate cryptocurrencies, raise concerns about hindering innovation in the U.S. industry.

The two legislators highlighted the need for Gensler to adjust his regulatory approach based on the "Eliminate Barriers to Innovation Act of 2021," passed by the House of Representatives in April. The Act requires the SEC and the Commodity Futures Trading Commission (CFTC) to establish a joint working group on digital assets with market participants, academic research organizations, and investor protection groups.

"Legislators and regulators should work together to strike a balance between protecting innovation and any new regulations to ensure the digital asset market thrives in the United States," the representatives wrote in the letter.

Meanwhile, competition for regulatory authority between the SEC and CFTC is intensifying. While the SEC deems most cryptocurrencies and ICOs as "unregistered securities" that must comply with SEC regulations, the CFTC holds a different view, as it could determine whether Ethereum falls under SEC or CFTC oversight.

However, CFTC Commissioner Brian Quintenz has rejected Gensler's classification, indicating a potential regulatory power struggle between the two agencies in the future.

This article is authorized for reprint from Horizon News Network.