8 US Lawmakers Urge SEC to Stop Crippling Crypto, Stifling Innovation

Eight U.S. lawmakers have sent a letter to the chairman of the U.S. Securities and Exchange Commission (SEC) regarding how the agency collects information from crypto companies. According to the crypto community, the SEC’s “requests” for information “are overburdensome, don’t feel particularly voluntary, and are stifling innovation.”

US Lawmakers Want Answers From SEC

U.S. Representatives Tom Emmer, Darren Soto, Warren Davidson, Jake Auchincloss, Byron Donalds, Josh Gottheimer, Ted Budd, and Ritchie Torres have jointly sent a bipartisan letter to the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, regarding how the SEC obtains information from cryptocurrency and blockchain companies.

Congressman Emmer explained in a tweet the reason behind the letter:

My office has received numerous tips from crypto and blockchain firms that SEC Chair Gary Gensler’s information reporting ‘requests’ to the crypto community are overburdensome, don’t feel particularly …voluntary … and are stifling innovation.

Rep. Warren Davidson tweeted: “We must promote American innovation rather than stifle it with an incoherent mix of bad regulation, selective enforcement, and ongoing inaction.” He added:

I joined Rep. Tom Emmer and colleagues sending a letter to SEC Chair Gary Gensler regarding the SEC crippling crypto in America.

In their letter to Gensler, the lawmakers pointed out: “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 for initiating investigations.”

The lawmakers stressed:

We have reason to believe that these requests might be at odds with the Paperwork Reduction Act (PRA).

The letter explains that pursuant to this act, “in seeking information from the American public, federal agencies must be good stewards of the public’s time, and not overwhelm them with unnecessary or duplicative requests for information.”

Congressman Emmer emphasized:

Crypto startups must not be weighed down by extra-jurisdictional and burdensome reporting requirements. We will ensure our regulators do not kill American innovation and opportunities.

The letter requests that the SEC answers 13 questions no later than April 29. The full list of questions can be found here.

Do you think the SEC is stifling innovation in the crypto sector? Let us know in the comments section below.