Pro-Crypto Congressman Mulls Pushing Legislation to Remove SEC's Gary Gensler

Pro-Crypto Congressman Mulls Pushing Legislation to Remove SEC's Gary Gensler

April 20, 2023

Crypto-friendly Congressman Warren Davidson is considering a move to push legislation that would remove the current Chairman of the Securities and Exchange Commission (SEC), Gary Gensler, from his position.

Davidson, a Republican from Ohio, announced his plans on April 16, stating that the move aims to correct what he calls a “long series of abuses” by the SEC. In his tweet, Davidson said he would introduce legislation to replace the Chairman with an Executive Director reporting directly to the agency’s board, where authority resides. He also noted that former Chairs of the SEC would be ineligible for the position.

“To correct a long series of abuses, I am introducing legislation that removes the Chairman of the Securities and Exchange Commission and replaces the role with an Executive Director that reports to the Board (where authority resides). Former Chairs of the SEC are ineligible,” said Warren.

The lawmaker made the comments responding to a tweet from Paul Grewal, Chief Legal Officer of Coinbase, who hailed commissioner Hester Pierce for calling out the agency’s shortcomings with regard to regulating the crypto sector.

Earlier this week, SEC Commissioner Hester Pierce spoke out against the agency’s aggressive push for regulations that could stifle innovation and harm the crypto industry.

“Today’s Commission treats its basic approach to exchange regulation as something that must not—indeed cannot—be altered to allow room for new technologies or for new ways of doing business,” Pierce said in an April 14 statement. 

“Today’s Commission tells entrepreneurs trying to do new things in our markets to come in and register. When entrepreneurs find they cannot, the Commission dismisses the possibility of making practical adjustments to our registration framework to help entrepreneurs register, and instead rewards their good faith with an enforcement action,” she added. 

Piecer commented on the back of a push by the SEC to alter the definition of an exchange, a move that could potentially have big implications for crypto.

Davidson’s comments come amid growing concerns that the SEC, under the leadership of Chairman Gary Gensler, may be pushing for overly restrictive regulations that could discourage innovation and harm the crypto industry.

Following the downfall of FTX in November 2022, the SEC has been vigorously targeting cryptocurrency firms under the guidance of Chairman Gary Gensler, with the so-called “Operation Choke Point 2.0” becoming more apparent. On that note, crypto adherents have vowed to fight back, criticizing the SEC’s handling of crypto-related issues and calling for greater regulatory clarity for the industry. 

That said, whereas the move to remove Gensler from his position is likely to face opposition from Democrats, who control both houses of Congress, it remains to be seen whether Davidson’s proposal will gain traction, considering the industry’s growing resistance against SEC’s attempts to expand its remit.

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