Just like most countries, the crypto regulatory landscape in the US remains to be quite hazy. Consider the case of the tax filings themselves. Just a day back we had reported a day back how the IRS intends to keep track of people’s crypto HODLings. However, formal regulatory guidance with respect to the whole tax process hasn’t been provided yet.
Keeping the overall regulatory ecosystem’s foggy nature in mind, two Republicans, Patrick McHenry, and Bill Huizenga, have expressed their concern with the Securities and Exchange Commission (SEC) chair Gary Gensler in their latest public letter.
‘Re-propose’ crypto rules, they say
The said policymakers, quite outrightly, questioned the SEC’s proposed changes to the definition of “exchange” and that of “dealer” in two separate proposals from earlier this year. They stated that the changes could stunt the growth of the crypto sector and decentralized finance.
“We are particularly concerned the proposed rules can be interpreted to expand the SEC’s jurisdiction beyond its existing statutory authority to regulate market participants in the digital asset ecosystem, including in decentralized finance (DeFi).”
Further supporting their argument, they added,
“As you know, DeFi has the potential to reduce market participants’ reliance on intermediaries. If these two rulemakings are left unadderessed, they have the potential to stifle innovation and harm market participants.”
McHenry and Huizenga went on to highlight how the SEC’s January proposal viewed entities marked as exchanges with a wide-angle lens. The Republicans worry that this change could mark “a step that exceeds the SEC’s statutory authority.” The other proposal concerns the regulator’s March rule that interpreted “as a part of regular business” under a “dealer.”
They re-emphasized,
“The SEC’s analysis in both proposals is insufficient to justify such proposed changes.”
In addition, the Republicans opined that the agency’s analysis failed to completely define the scope of the impacted market participants. They also pointed out that the same stalled sufficient details at the cost of compliance, and further highlighted that “the rulemakings fail to define the SEC’s statutory authority.”
Towards the end, the Republican officeholders called to the securities watchdog to provide public comment on all rulemakings. They also demanded the rules to be “re-propose(d)” with sufficient economic analysis, justification, and greater clarity.