- US Senator Cynthia Lummis has continued her criticism of SEC Chair Gary Gensler’s method of regulating cryptocurrencies.
- She emphasized that Congress also has a responsibility to ensure that matters involving digital assets, particularly cryptocurrencies, aren’t solely managed by the SEC.
A significant portion of the cryptocurrency community is frustrated with the US Securities and Exchange Commission’s (SEC) method of “regulation by enforcement” concerning digital assets. Consequently, various representatives from both parties in Congress are calling for SEC Chair Gary Gensler to step down from his role.
In an interview with CNBC’s Squawk Box, Senator Cynthia Lummis remarked that the fault shouldn’t rest solely with the SEC chair. While she does not support his actions, she still conveyed her displeasure over the enforcement strategies employed under Gensler’s leadership.
Senator Lummis: Congress Needs to Act
The Republican senator from Wyoming highlighted the necessity for Congress to draft more precise legislation governing digital assets, especially cryptocurrencies. She called on her fellow lawmakers to ensure that the issue does not rest exclusively on the SEC’s judgement.
Additionally, Lummis criticized Congress for its failure to enact necessary laws, inadvertently granting Gensler broad authority to handle the situation.
Moreover, Lummis believes that besides Bitcoin (BTC) and Ethereum (ETH), other cryptocurrencies may qualify as commodities, thereby placing them under the jurisdiction of the Commodity Futures Trading Commission (CTFC) rather than the SEC.
“It’s essential to have a definitive understanding,” Lummis stated. “The Howey Test is a resource we can utilize, and as it has evolved, there may be additional assets beyond Bitcoin and Ethereum that should be under the Commodity Futures Trading Commission’s jurisdiction.”
Furthermore, the senator from Wyoming pointed out that US regulations concerning cryptocurrency lag considerably behind the “highly effective” regulations in the European Union. She argued that the US should not allow other nations to outpace it in financial services.
Gensler Likely to Stay in a Harris Administration
Lummis expressed her belief that Gensler is very fond of his position. Should Vice President Kamala Harris win the upcoming election in November, it is probable that he will continue in his role. Conversely, former President Donald Trump has promised to remove him if he wins.
However, experts have differing views on this matter. A blog post by a law professor indicates that according to Reorganization Plan No. 10 of 1950 Section 3, while the president can appoint SEC commissioners, there is no clear statutory direction regarding the president’s ability to remove the agency’s chair.
Nonetheless, the president could either compel the SEC chair to resign or remove them “for cause,” implying that valid reasons such as incompetence must exist for such removal. While this may lead to legal challenges, even the Supreme Court is likely to side with the executive branch if the reasons are substantiated.
Additionally, Congress could propose a bill to address the situation through a majority vote.
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