US Congressman Calls SEC Actions Against Crypto Industry Exceeding Limits

US Regulators, Securities Commission and Exchanges reap criticism from the crypto community. (Photo; Doc. Investopedia)

JAKARTA - The United States Securities and Exchange Commission (SEC) and its chairman, Gary Gensler, have drawn criticism from the crypto community for law enforcement by the SEC against the crypto industry. Recently, the supervisory agency took action against two leading cryptocurrency exchanges.

The Nasdaq-listed crypto exchange Coinbase faced a lawsuit from the SEC on Tuesday, while its Binance and CEO, Changpeng Zhao (CZ), was faced with 13 charges by securities regulators the day before. The SEC called 12 crypto tokens a security in a lawsuit against Binance and several other tokens in a lawsuit against Coinbase.

US Representative Torres, a member of the House of Representatives' Financial Services Committee who oversees the SEC, criticized Coinbase's latest law enforcement measures and called them an example of overregulatory law enforcement.

Torres added that the move shows a lack of respect for Congress that is developing a framework on the matter. Several other lawmakers have also criticized SEC and Gensler's approach to law enforcement to the crypto industry.

Members of the French Hill Congress, which chaired the House's subcommittee on digital assets, stated that the recent SEC crackdown was just an attempt to distract from its failure to prevent the failure of the FTX crypto exchange. Hill and several other lawmakers have released draft legislation discussions to provide a clear legal framework and in accordance with laws related to digital asset regulations.

Hill stressed the need for regulatory clarity and a proper framework for the crypto industry. According to him, if the framework already exists, enforcement actions carried out by the SEC will not be necessary. The bill proposed by Hill and his colleagues aims to provide adequate consumer protection and encourage innovation in this sector.