September 20, 2024
By Our Correspondent
Congressman French Hill has expressed his concerns regarding the U.S. Securities and Exchange Commission (SEC) and its management of digital asset regulations. He criticized Chairman Gary Gensler for fostering an environment of legal ambiguity and a politicized regulatory framework. While acknowledging the legislative accomplishments of his subcommittee, he voiced his dissatisfaction with the SEC’s vague and expansive regulations, which he believes hinder the progress of digital asset companies and impede innovation.
Congressman French Hill (R-AR), who chairs the House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion, addressed a hearing on Wednesday entitled “Dazed and Confused: Breaking Down the U.S. Securities and Exchange Commission (SEC)’s Politicized Approach to Digital Assets.” This hearing examined the SEC’s regulatory practices concerning digital assets under Chairman Gary Gensler, with a particular focus on its enforcement strategies and the resulting legal ambiguities.
During his address, Hill recognized the legislative successes of the subcommittee, which include the Clarity for Payment Stablecoins Act and the Financial Innovation and Technology for the 21st Century Act (FIT21) regulatory framework. Nevertheless, he raised concerns about the SEC’s conduct under Gensler’s leadership, stating:
Despite our bipartisan legislative advancements, we are disheartened by the SEC, under Chairman Gensler, opting to preempt Congress’s work and inject political considerations rather than acting as an impartial regulator.
Hill contended that the SEC’s methodology has led to confusion and uncertainty, particularly due to its broad and ambiguous regulations that place significant burdens on digital asset firms. He questioned, “How is this protecting the public?” emphasizing that this approach results in a detrimental situation for market participants.
The legislator expressed discontent with the SEC’s approach to digital asset custody services, asserting, “The SEC’s bias against digital assets is most evident in Staff Accounting Bulletin 121, which disrupts longstanding legal standards in the custody sector and imposes an insurmountable barrier for financial institutions aiming to offer digital asset custody services to their clients, especially banks and bank trust departments.”
He further pointed out that the SEC’s measures have compelled blockchain developers to leave the United States and criticized the process for approving bitcoin exchange-traded products (ETFs). “The SEC’s recent endorsement of exchange-traded products for bitcoin and ether was only achieved because Chairman Gensler attempted to exert excessive influence but ultimately could not justify to the courts the SEC’s approval of bitcoin futures ETFs while denying the proposed spot Bitcoin products,” Hill remarked, concluding:
We oppose the misuse of SEC enforcement and the obstacles it creates for legitimate participants striving to adhere to regulations and foster innovation and technology within our markets.
