In an effort to smooth out the path for cryptocurrency regulation, U.S. Rep. French Hill, Vice-Chairman of the House Committee on Financial Services Republicans and Subcommittee Chairman, has penned a letter to Gary Gensler, the Chairman of the Securities and Exchange Commission (SEC).
This is in line with the rising trend of lawmakers keen on addressing the gray areas of the burgeoning digital asset market.
A plea to Gensler for constructive engagement
The core intent of the communication is to underline the necessity of a concerted approach towards establishing a robust regulatory framework for digital assets.
The lawmakers are keen to drive home the point that the USA must continue to reap the benefits of blockchain technology and digital assets through a regulated market.
The letter highlights the sustained efforts by the House Committee on Financial Services and the House Committee on Agriculture, who have held more than 15 hearings on digital asset policy over the past four years.
In their bid to close existing regulatory gaps, multiple bills have been introduced, including the Clarity for Digital Tokens Act and the Digital Commodity Exchange Act.
Both pieces of legislation aim to establish clear-cut regulations for digital asset projects and digital commodities respectively.
Further, the letter refers to the release of a draft on the digital asset market structure, which delineates precise requirements for digital asset intermediaries and trading platforms.
This milestone effort is intended to establish definitive guidelines for market participants and bolster consumer protections for American digital asset traders.
The controversy over regulation by enforcement
The letter, co-authored by Rep. Dusty Johnson, further delves into criticism of the SEC’s approach to regulation. The authors express their concern over what they perceive as the SEC’s preference to regulate by enforcement rather than by drafting comprehensive guidelines.
In their view, the SEC’s repeated attempts to regulate digital asset intermediaries through staff actions and rulemakings have led to increased confusion rather than clarity.
This concern is amplified by the Commission’s actions, which they argue appear to be timed for maximum publicity and political impact.
Arguing that the current approach does not serve public protection, the lawmakers call for legislation that prevents collapses of digital asset firms instead of relying on enforcement actions to punish misconduct after damage has been done.
By closing the digital asset market regulatory gap, they aim to establish a process for firms to operate within the regulatory parameters and adhere to consumer protection guidelines.
The letter concludes with an invitation for productive engagement with the SEC, emphasizing the importance of collaboration in pioneering such groundbreaking legislation.
The lawmakers urge Gensler to work closely with them, making it clear that this is not a one-sided conversation but a collaborative effort to find a balance between fostering innovation and providing consumer protection.
With an eye on the future of digital assets, U.S lawmakers are evidently eager to ensure that the road ahead is well-paved.
Through initiatives like this letter to Gensler, they are advocating for the principles of clarity, cooperation, and the enforcement of regulations that serve to protect all parties in the dynamic digital assets market.
