The U.S. Securities and Exchange Commission (SEC) Chief Gary Gensler will testify before Congress for the first time. The official will have to explain his agency’s approach to regulating the cryptocurrency ecosystem.
The House Financial Services Committee will hold its first hearing on oversight of the SEC’s actions on April 18. This was announced by Congressman Patrick McHenry. Congress is particularly interested in the SEC’s approach to regulating cryptocurrency assets and the agency’s rulemaking in this context.
The Congressman noted plans to raise the issue of “laying down a regulatory sphere for digital assets” by the SEC. The House Financial Services Committee has jurisdiction over all aspects of the U.S. financial services sector, including banking, securities, and digital assets. The upcoming hearing will respond to criticism of the SEC’s actions to regulate the cryptocurrency market from the blockchain industry and certain U.S. politicians, who have accused the regulator of overstepping its authority and called on Congress to take action.
Meanwhile, the Securities and Exchange Commission, backed by the White House, requested an additional $2.4 billion in funding to expand its staff and further combat “misconduct in the crypto space.” Gary Gensler reported that in 2022, the regulator “received more than 35,000 separate tips, complaints, and referrals from whistleblowers and others,” which resulted in over 750 enforcement actions and approximately $6.4 billion in fines and penalties. The cryptocurrency industry was involved in 30 enforcement actions, with $242 million in fines paid by industry representatives.
Among the regulator’s most recent actions against the crypto industry are charges against the crypto exchange Beaxy, forcing the company to suspend its operations, explaining this by “the uncertain regulatory environment.” The SEC’s most high-profile actions against the blockchain industry in 2023 include an investigation into the crypto exchange Kraken, as well as bizarre “legal threats” against Coinbase. According to experts and the crypto community, the SEC’s attacks on exchanges could have drastic negative consequences for the DeFi sector in the U.S.
