- GOP Rep. Tom Emmer said Gary Gensler's SEC needs to lay off the crypto space in an interview with the Financial Times.
- The co-chair of the Congressional Blockchain Caucus also differs from Gensler's view that most cryptocurrencies are securities.
- Some in the industry say SEC has preferred punitive action to clear rule-making – potentially discouraging innovation.
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Minnesota Republican Rep. Tom Emmer called out Securities and Exchange Commission Chair Gary Gensler on Wednesday, saying the agency needs to lay off the crypto space in an interview with the Financial Times.
Emmer, a senior Republican who is also co-chair of the Congressional Blockchain Caucus, told the FT that he sharply disagreed with Gensler's approach to regulating crypto.
"All regulators want more jurisdiction," he said. "But I think Gary Gensler's vision is much broader, and frankly because of it, he's having a negative impact – and potentially will have a really big negative impact – on retail investors and opportunities out there that entrepreneurs and innovators might provide."
Gensler has sought to tame what he has called the "Wild West" of crypto, leaning on enforcement actions while promising new regulatory requirements. A key tool in his arsenal has been arguing that certain crypto products represent unregistered securities offerings, which are illegal under SEC jurisdiction.
Meanwhile, the IRS considers crypto a form of property for tax purposes, while the CFTC has designated it a commodity. Emmer said he differed from Gensler's view that most cryptocurrencies are securities.
"I think the vast majority of cryptocurrency offerings or related offerings are actually currencies or commodities - the SEC is not involved," he said.
"If the SEC were to deem one of these coins a security, the value of that token would plummet. And those retail investors would be seriously hurt - that's directly the opposite of his mission and his authority," Emmer added.
Some in the industry have grown critical of Gensler's approach, complaining that his SEC has preferred punitive action to clear rule-making - which they say will discourage innovation.
"I am concerned that the initial reaction of a regulator is always to say 'I want to grab hold of this and make it like the markets I already regulate,'" SEC Commissioner Hester Peirce told the FT in June. "I am not sure that's going to be great for innovation."