Republicans of the House Financial Services Committee have criticized U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler, stating he is using Rule 3b-16 amendments to impose his views on cryptocurrency assets. In a letter sent to the SEC, republicans push back against the new proposed definition of “exchange” and its implications.

Financial Services Committee Republicans Push Back Against SEC’s Proposed Ruleset

Republicans of the House Financial Services Committee are pushing back against the proposed amendments to Rule 3b-16 presented by the U.S. Securities and Exchange Commission (SEC) that expands the definition of “exchange.”

The group, comprising Chair Patrick McHenry and 28 other representatives, sent a letter on June 13 criticizing the implications of the approval of the rule, and its effects on the cryptocurrency market and its operators.

According to these representatives, passing this rule would imply that software protocols and even developers of decentralized financial products would have to register as exchanges with the SEC. This would be detrimental to adoption of the tech in the U.S.

Republican representatives stated:

The proposed rule will stifle innovation and harm digital asset market participants and the U.S. economy more broadly. We urge you to withdraw this proposal as it would effectively shut down development of the digital asset ecosystem and continue to stagnate U.S. technological innovation.

Furthermore, the group of Republicans disagreed with an assertion made in the proposed rule, which states that “it is unlikely that systems trading a large number of
different crypto assets are not trading any crypto assets that are securities.” The letter explains the SEC should not generalize or make “sweeping judgments” in its rulemaking.

SEC Chairman Gary Gensler Said to Be Pushing His Personal Views

The letter goes even further, accusing SEC Chair Gary Gensler of taking advantage of his position to propose rules that fit his perception of cryptocurrency. The letter states:

It is clear that Chair Gensler is using this proposal to push his own personal views regarding digital assets. It appears this proposed rule is an attempt to assert this personal view as official SEC policy without adequate analysis or justification.

Finally, the group accused the SEC of trying to front-run Congress, which is already working on different bills regarding cryptocurrency, with some of them being introduced by representatives part of the committee like Tom Emmer.

Rep. Warren Davidson, who also signed the letter, recently introduced a bill to oust Gary Gensler from his position as chairman of the SEC, titled the “SEC Stabilization Act.“

What do you think about the House Financial Services Committee Republicans’ stance on the SEC’s proposed rule? Tell us in the comments section below.