SEC Chairman Question Senators About Overbearing Crypto Reporting Requirements

Rep. Tom Emmer of Minnesota’s 6th district recently sent a letter to Gary Gensler – Chairman of the Securities and Exchange Commission (SEC) – with critical questions about the authority’s crypto industry reporting requirements.

The letter is written on behalf of multiple blockchain firms that claim these requirements – framed as “requests” – aren’t exactly voluntary, and are stifling innovation.

Stifling the Crypto Sector

Sent on Wednesday, the letter was co-signed by seven other congressmen spanning across party lines. These include Darren Soto, Warren Davidson, Jake Auchincloss, Byron Donalds, Josh Gottheimer, Ted Budd, and Ritchie Torres –  4 Republicans, and 4 Democrats.

The letter suggests that the SEC has been inappropriately using its investigative powers in violation of the Paperwork Reduction Act. The act requires federal agencies to be “good stewards of the public’s time” and “not overwhelm them with unnecessary or duplicative requests for information”.

“It appears there has been a recent trend towards employing the Enforcement Division’s investigative functions to gather information from unregulated cryptocurrency and blockchain industry participants in a manner inconsistent with the Commission’s standards,” reads the letter.

It follows up with a list of 13 questions about how and why the SEC is soliciting information from various blockchain firms. This includes a request for the number of documents requests the SEC has sent to individuals and firms about their involvement with blockchain technology over the past five years.

It also asks if there is a limit to the number of related requests the SEC can make per year, and if the SEC has conducted a cost-benefit analysis on the efficacy of its requests.

“Crypto startups must not be weighed down by extra-jurisdictional and burdensome reporting requirements,” stated Emmer regarding the letter.  “We will ensure our regulators do not kill American innovation and opportunities.”

Bipartisan Critique of Gensler

The letter demonstrates a refreshing wave of bipartisan defense for crypto, about which a clear divergence of opinion has formulated between parties. While many Republicans have been quick to support the industry’s growth across the U.S., Democrats have been more skeptical.

For example, the three U.S. senators that are known to own Bitcoin – Cynthia Lummis, Pat Toomey, and Ted Cruz – are all Republican. Meanwhile, Democratic senator Elizabeth Warren has been one of the loudest critics of cryptocurrencies, citing everything from their volatility to their use in criminal activity.

Even New York Democrat Eric Adams, who voluntarily received his first three paychecks in Bitcoin, has now stated that he doesn’t support crypto mining due to environmental concerns.

Of course, there’s also been some bipartisan opposition to crypto. Both former Secretary of State Hillary Clinton and President Donald Trump are fearful that BItcoin could undermine the US dollar.

Rep. Tom Emmer from Minnesota’s 6th District recently wrote to Gary Gensler, Chairman of the Securities and Exchange Commission. He asked questions about the SEC’s requirements for crypto industry reporting.

This letter was written by multiple blockchain companies on behalf of those who claim that these requirements, referred to as “requests”, are not voluntary and impede innovation.

The Crypto Sector is being stifled

The letter, which was sent on Wednesday, was signed by seven other congressmen from across the political spectrum. These are Darren Soto and Warren Davidson, Jake Auchincloss and Jake Auchincloss. Jake Auchincloss and Josh Gottheimer. Ted Budd and Ritchie Torres are the other co-signers.

This letter indicates that the SEC is using inappropriately its investigative powers under the Paperwork Reduction Act. Federal agencies are required to “good stewards” the public’s time and not overwhelm it with redundant or duplicate requests for information.

The letter states that there appears to be a trend in recent years towards using the Enforcement Division’s investigative capabilities to gather information from unregulated blockchain industry participants in a way inconsistent with the Commission standards.

The SEC then follows up with 13 questions regarding why and how the SEC is seeking information from different blockchain companies. The SEC requests information about the number of documents it has requested from individuals and companies regarding their involvement in blockchain technology over five years.

It also inquires whether there is a limit on the number of related requests that the SEC can make each year and if the SEC conducted a cost-benefit assessment of the effectiveness of its requests.

Emmer stated that “Crypto startups should not be burdened by extra-jurisdictional reporting requirements.” “We will ensure that our regulators don’t kill American innovation and other opportunities.

Bipartisan Critique of Gensler

This letter shows a refreshing wave in bipartisan defense of crypto. There is clearly a divergence between political opinions about it. Many Republicans were quick to support the growth of the industry in the U.S. but Democrats were more skeptical.

The three U.S. senators who are known to have Bitcoin in their possession – Pat Toomey and Cynthia Lummis – are all Republican. Democratic senator Elizabeth Warren, on the other hand, has been one of the most vocal critics of cryptocurrency, citing everything, from their volatility to their use for criminal activity.

Eric Adams, a New York Democrat, was able to receive his first three paychecks in Bitcoin. He now says he does not support crypto mining because of environmental concerns.

There has been bipartisan opposition crypto. Trump and Hillary Clinton, former Secretary of State, are concerned that BItcoin might undermine the US dollar.