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Key Points
- U.S. lawmakers have filed a motion to restructure SEC and reduce the power bestowed on the chairman position.
- Senator Warren Davidson wants the SEC restructured to do away with the chair position as it could be involved in market manipulation.
- Senator Davidson also wants current SEC Chair Gary Gensler fired.
U.S. lawmakers have filed a bill to restructure SEC
With market manipulation possibility in mind, U.S. lawmakers have filed a bill to allow the restructuring of the SEC to do away with the chairman position. Senator Warren Davidson and Rep. Tom Emmer were responsible for introducing the “SEC Stabilization Act” into the House of Representatives, according to his June 12 announcement.
The bill aims to fire the currency Securities and Exchange Commission (SEC) Chair Gary Gensler and do away with that position forever. The bill is backed by community cries that SEC chairpersons could be involved in market manipulation by forcing special asset classes like crypto to bend to their will without first introducing binding laws.
In a statement, Davidson said:
“U.S. capital markets must be protected from a tyrannical Chairman, including the current one. That’s why I’m introducing legislation to fix the ongoing abuse of power and ensure protection that is in the best interest of the market for years to come. It’s time for real reform and to fire Gary Gensler as Chair of the SEC.”
Davidson had been working on the bill since January this year following observations that SEC chair Gary Gensler had been showcasing too much power over markets. The bill will redistribute power between the Chair and commissioners whilst removing Gary Gensler from office. It will also add a sixth commissioner to the agency, allowing any party to hold a majority on the commission and also introduce an executive director position.
SEC chairman criticized for indirect market manipulation
The crypto market has been having bad faith with SEC chairman Gary Gensler and accuses him of market manipulation. They have been noticing that he introduces new lawsuits in questionable intervals as they coincide with green zones, which results in the market’s collapse.
Gary Gensler was also caught saying that the U.S. doesn’t need any more new crypto assets, which sent shock waves across the crypto markets. SEC also mentioned around 67 crypto assets in all their crypto lawsuits claiming they are securities. As a result, some of these assets have lost value by as much as 19%, a move that has been heavily criticized and branded as possible market manipulation.
Rep Tom Emmer, the co-author of the bill, claimed that the SEC Stabilization Act is necessary as investors will be shielded from reckless leadership.
“The SEC Stabilization Act will make common-sense changes to ensure that the SEC’s priorities are with the investors they are charged to protect and not the whims of its reckless Chair.”
Though Davidson and Emmer never mentioned crypto assets in their statements or bill, they are pro-crypto and known to be critical of Gensler’s officiating. Emmer, for instance, had called Gary Gensler a “bad faith regulator” before while Senator Davidson campaigned for crypto and served as the vice chair of the House Financial Services Committee’s new Subcommittee on Digital Assets, Financial Technology, and Inclusion.
Following the SEC’s recent actions companies like Robinhood, Coinbase, and Bittrex have been forced to rethink their U.S. market strategy. Others like Animoca Brands have also left the U.S. with many more expected to follow as they are avoiding colliding with the regulator over trading assets that the regulator sees as securities.
The new bill comes at an opportune time when the crypto community is on the verge of hitting back at the SEC for unfavorable regulation. However, only time will tell how the courts will rule and the ruling’s influence on the industry’s future.
Keep watching Fintech Express for updates on regulations and other fintech-related developments.