Rep. French Hill condemns the SEC’s approach to digital assets, citing politicization and enforcement issues that affect the market.
US Lawmaker Criticizes SEC for ‘Enforcement Abuse’ Against Crypto Firms
Arkansas Representative French Hill, chairing the House Subcommittee on Digital Assets, has heavily criticized the U.S. Securities and Exchange Commission (SEC) and its chair, Gary Gensler. In a recent hearing, Hill accused the SEC of introducing political bias into the regulation of crypto firms. He claims that this approach has caused “confusion and uncertainty” in the digital asset market.
Concerns Over SEC’s Regulatory Approach
In a hearing on September 18, Hill expressed frustration with the SEC’s handling of digital asset regulations. Titled “Dazed and Confused: Breaking Down the SEC’s Politicized Approach to Digital Assets,” the session focused on the SEC’s enforcement methods and their impact on the market. Hill criticized Gensler’s leadership, suggesting that it has led to broad and unclear regulations, which burden digital asset firms and hinder innovation.
Regulatory Alternatives and Legislative Progress
Hill highlighted the subcommittee’s achievements, such as the Clarity for Payment Stablecoins Act and the Financial Innovation and Technology for the 21st Century (FIT21) Act. Despite this progress, Hill argued that the SEC’s actions have overshadowed Congressional efforts.
Impact on Digital Asset Custody and Innovation
The SEC’s handling of digital asset custody services has come under scrutiny. Hill criticized the Staff Accounting Bulletin 121, which he believes imposes undue hurdles on financial institutions. This bulletin, according to Hill, disrupts established legal standards and creates barriers for institutions offering digital asset custody services.
Effects on Blockchain Developers and ETFs
Hill also pointed out that the SEC’s regulations have driven blockchain developers out of the U.S. He questioned the SEC’s approval process for bitcoin exchange-traded products (ETFs), noting inconsistencies in the handling of bitcoin futures versus spot bitcoin products. Hill believes that the SEC’s decisions have not been transparent and have contributed to market instability.
A Call for Fair Regulation
Rep. Hill’s critique of the SEC underscores a broader concern about regulatory clarity in the digital asset space. He advocates for a fairer regulatory environment that supports innovation while preventing abuse. Hill’s remarks reflect ongoing debates about the role of government agencies in managing emerging technologies.
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