In a year when numerous countries have embraced cryptocurrencies as a means to foster economic growth and innovation, the United States Securities and Exchange Commission (SEC) has faced mounting criticism from the crypto industry.

Since assuming the role of SEC Chair in April 2021, Gary Gensler’s tenure has been marked by an aggressive approach towards enforcement actions, lawsuits, and subpoenas targeting crypto firms, leaders, CEOs, and even cryptocurrencies deemed as “securities.”

The industry has increasingly called for new leadership within the SEC, one that can support innovation and enable the flourishing of the nascent crypto sector. 

US Congressman Warren Davidson has joined the chorus of voices advocating for a change, stating that SEC Chair Gary Gensler should be removed from his position in 2024. 

Mass Dismissal Of SEC Cases Sparks Criticism

A recent article highlighted by Davidson as one of the reasons for Gensler’s removal in 2024 shed light on a scandal at the SEC’s administrative tribunal, exposing one of the fundamental flaws in the agency’s adjudication process.

The article highlighted that judges in these courts, responsible for ruling on enforcement actions brought by the SEC’s regulators, are employed by the prosecutors themselves. This revelation raised concerns about the lack of independence and potential bias within the system.

According to the report, the SEC acknowledged the lapse in controls and pledged to inform the public about the scope of the issue while preventing similar lapses in the future. 

However, critics argue that the mass dismissal of open cases related to the scandal is an evasion of the review promised by the Supreme Court, undermining accountability.

In light of these developments, Congressman Davidson’s stance against the leadership of the SEC and Gensler’s role as Chairman has been consistent.

As reported by Bitcoinist, in June 2023, Davidson introduced a stabilization bill aimed at completely restructuring the SEC and removing Gensler from his position to rectify past abuses. 

This move follows his earlier statements in May, where he expressed concerns about the SEC’s unjust actions against the crypto industry and the need to protect the US capital markets from a “tyrannical” chairman.

Gensler’s Crypto Agenda Nearing A Close?

The SEC Stabilization Act proposed by Congressman Davidson advocates for a shift from the current single-chairman structure to a six-commissioner body. 

This change aims to ensure a more balanced and diverse team that will oversee all rulemaking, enforcement, and investigations, eliminating the potential influence of a single individual’s agenda. 

Additionally, the proposed legislation includes the creation of a new executive director position to enhance the agency’s operational efficiency and effectiveness, providing clear leadership and oversight.

Congressman Davidson argues that the SEC’s “abuse of power” is detrimental to the market and stifles innovation within the crypto industry. Davidson believes that substantial reforms are necessary to safeguard the interests of investors and the marketplace for years to come.

As the crypto community amplifies its call for a change in SEC leadership, the debate surrounding Gensler’s role intensifies. 

The industry seeks a chair who can strike a balance between regulatory oversight and fostering a supportive environment for innovation, ultimately driving the growth of the crypto sector in the United States.

Featured image from Shutterstock, chart from TradingView.com