SEC’s Hostile Approach to Crypto Space Made Investors Lose Billions of USD: Senate Banking Committee

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Yuri Molchan

Some US senators are not happy with Gary Gensler’s constant efforts to take crypto industry under his control


XRP enthusiast @801_XRP has shared extracts from a recent US Senate Banking Committee hearing on the crypto crash. In them, two of its members expressed concerns about the crypto space still not being regulated, investors losing billions of USD recently, and the SEC’s constant but not very successful attempts to take the crypto space under its control.

The tweet features video extracts of two members of the committee — Senator Tim Scott of South Carolina and Senator Thom Tillis of North Carolina. They spoke about the lack of regulation in the crypto space, which has become a serious issue by now, mentioning a series of recent crashes in the crypto space, investors losing a great deal of money and attempts by the SEC and its chairman Gary Gensler, in particular, to use hostile approaches to regulate the space.

Overall, during the hearing, which was called “Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets,” various issues were discussed. These include not only the SEC and its hostile regulation of the crypto space but also the regulation of stablecoins and whether the SEC should collaborate with the CFTC.

“Regulators have muddied the waters”

Senator Scott stated that the regulators have muddied the waters in their attempts to regulate the crypto space. The committee has been hearing various calls, which stated things like the necessity for regulation to suggestions that U.S. regulators have all the necessary tools to supervise the crypto space.

He regretted the absence of the SEC’s Gary Gensler at that hearing, stating that they want to hear his testimony before September.

The Senator also emphasized that the regulators have permitted activity in the crypto space but did not provide manifold players with “clear rules of the road.” This has brought on many recent failures in the space, which the hearing was dedicated to.

According to Scott, if the SEC had provided “anything besides hostility to the crypto industry,” it may have been possible to avoid the massive crypto crashes in 2022 — FTX, Celsius, BlockFi, etc. — and save investors billions of U.S. dollars they lost as those crypto giants went bankrupt.

Unhappy with Gary Gensler’s methods

Senator Tillis stated that he is concerned about Gensler’s actions in trying to regulate the crypto space. He said: “I don’t find much comfort in knowing that Mr. Gensler thinks he has full authority to implement a regulatory regiment” because “he has been going a little too fast and a little too expensive on rulemaking.”

Therefore, Tillis expressed a hope that the U.S. Congress would step in with setting up a regulatory basis for the crypto industry. Both senators are calling for Congress to take action on this.

The SEC has been fighting Ripple Labs since December 2020 in court, accusing the company of selling its XRP tokens as unregistered securities. It has recently sued the U.S. Kraken exchange for offering staking-as-a-service without warning investors of possible risks. Earlier, it made Coinbase exchange shut down its crypto lending service.

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