Republicans Continue to Defend Crypto in Latest Letter to SEC

The Grand Old Party continues to fight on the side of the crypto industry. On Tuesday, House Financial Services Committee Republicans asked the U.S. Securities and Exchange Commission to rescind its proposed rule to change the definition of “exchange.” 

In the letter, the group of lawmakers said the SEC’s proposed rule will “stifle innovation and harm digital asset market participants and the U.S. economy more broadly.”

The rule change, first proposed by the SEC last year, would redefine the term “exchange” within the Securities Exchange Act to “include systems that offer the use of non-firm trading interest and communications protocols to bring together buyers and sellers of securities.”

Republican lawmakers argue in the letter that this definition exceeds the SEC’s powers and would “shut down the development of the digital asset ecosystem and continue to stagnate U.S. technological innovation.” 

It is not the first time Republicans have blasted the SEC for its apparent aggression against the digital asset industry. 

Republican SEC commissioner Hester Peirce has previously said that the SEC’s demonstrated position “sends a message that we are uninterested in facilitating innovation and competition in the financial markets and instead seek to protect incumbents.”

And just last month, Republican lawmakers said in a different letter that SEC Chair Gary Gensler was forcing the digital assets ecosystem into an improper regulatory framework.

The SEC has gone after a number of major crypto brands this year. Kraken, Coinbase, Gemini, Binance and Binance US have all been hit with lawsuits. 

SEC Chair Gary Gensler appears to be cracking down on all the coins and tokens he believes are unregistered securities, and his agency has charged a number of digital asset companies as a result. 

The top regulator has even hinted that the digital asset industry may not be welcome on U.S. shores at all—saying last week, “We don’t need more digital currency,” and adding that the current industry was “built on non-compliance.” 

This harsh stance has been criticized by lawmakers who argue that the regulator is overstepping its mark—and by crypto companies who are now eyeing up other countries to do business.