Congressman Blasts US SEC, Gensler for Violations & SAB 121 Rule

Congressman Tom Emmer criticizes SEC Chair Gary Gensler for overstepping with SAB 121, risking investor trust and market efficiency.

Wednesday, 08 May 2024 20:12

Tom Emmer, the House of Republicans’ majority whip, has slammed Gary Gensler, the Chairman of the Securities and Exchange Commission (SEC), for his stewardship of Staff Accounting Bulletin (SAB) 121. Emmer contends that Gensler’s methodology opposes the SEC’s primary purpose—to protect investors, promote capital formation, and sustain fair, orderly, and efficient markets. This accusation arises from worries that the new regulation can cause overwhelming regulatory overreach.

In his criticism, Emmer underscored what he sees as the SEC’s departure from its statutory duties. He further states that the SAB 121 regulation restricting banks from effectively evidence of holding crypto assets might deteriorate market efficiency and investor confidence. This position reflects a larger Republican worry about the potential adverse effects of regulatory enlargement on the capital markets.

The SEC’s statutory mission is to protect investors, facilitate capital formation, and maintain fair, orderly, and efficient markets.

Chairman Gensler is violating all three of these with his illegal SAB 121 rule. pic.twitter.com/Wky2K8zglR

— Tom Emmer (@GOPMajorityWhip) May 7, 2024

Tom Emmer Defends Innovation Against SEC

This is not the first time discord has arisen between Congressman Emmer and SEC Chairman Gensler regarding the regulation of digital assets. In March, Emmer had previously accused Gensler of going beyond the regulatory scope of the SEC with a supposed anti-cryptocurrency bias. Emmer stressed that the broad reading of the SEC’s rules as “guidance” is wrong for Congress and the public.

The tension reflects the continuous battle between promoting innovation in the rapidly developing crypto market and providing strong regulatory supervision. Emmer has always been a strong champion of minimal regulatory intervention, advocating for laws that foster innovation and protect the investor. His bill, the CBDC Anti-Surveillance State Act, seeks to ensure the American people’s financial privacy from intrusive government. It already has 120 co-sponsors and support from a wide variety of stakeholders.

Major Crypto Firms Face Increased SEC Regulations

Recently, the SEC has become more aggressive and taken a more active role toward major players in the crypto industry. Binance and Kraken, among other entities, have been targeted under stricter regulations. In addition, the regulator has expanded its jurisdiction to the decentralized finance (DeFi) sector and has issued a significant notice to UniSwap, indicating rising regulatory attention.

The regulator’s aggressive approach has resulted in legal challenges. April saw Consensys, a major Ethereum developer, file a lawsuit against the SEC, in which the Commission’s recent’ vibe’ is inclined towards Ethereum being a security rather than a commodity. This comes after a Wells notice was sent to Consensys regarding its MetaMask wallet product. Consensys claims that its activities largely revolve around building an interface using MetaMask and do not make it a broker that would be subject to a strict securities law regime.