Home / Congressmen Introduces Bill to Fire Gensler: Here’s What it Would Mean for Crypto
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Congressmen Introduces Bill to Fire Gensler: Here’s What it Would Mean for Crypto

Published June 13, 2023 12:52 PM
Omar Elorfaly
Published June 13, 2023 12:52 PM

Key Takeaways

  • Tom Emmer and Rep. Warren Davidson introduce SEC Stabilization Act to restructure SEC and fire Chair Gary Gensler
  • Alleged abuses committed by Gary Gensler
  • How would the US crypto market react?

House Majority Whip Tom Emmer and Warren Davidson have introduced the SEC Stabilization Act  that aims to restructure the US Securities and Exchange Commission and effectively remove Chair Gary Gensler from his post. But how would the US crypto market react to that?

The SEC Stabilization Act

The two congressmen took the floor to highlight what they proclaimed as “failures and abuses” committed by the current chair of the SEC, doubling down on the importance of restructuring the SEC and appointing a new director who would help correct said failures and abuses. Rep. Warren Davidson presented a long list of what he sees as failures committed by Gensler, most notable among which are:

  • “Essentially a hotel California rule for crypto where you can check in anytime you like, but you can never leave”
  • A de facto ban on crypto through proposed custody rule
  • Unhappy companies and capital leaving the country

The bill proposed by Emmer and Davidson requests the removal of Gensler from the Chair position and the appointment of a new executive director who would report to the board where all authority resides. Former SEC directors would not be eligible for the position under the SEC Stabilization Act.

House Majority Whip Tom Emmer reported that “American investors and industry deserve clear and consistent oversight, not political gamesmanship. 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.”

Rep. Warren Davidson reported that “U.S. capital markets must be protected from a tyrannical Chairman, including the current one,” adding that “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.”

A Long List Of Enemies

Under Gensler’s leadership, the SEC has been head-to-head with the entire US crypto industry. So far, the SEC has filed lawsuits against the following:

  • Binance, the world’s biggest crypto exchange
  • Coinbase, the biggest US-based crypto exchange and Binance’s biggest competitor
  • Ripple, another major US-based crypto exchange

The questionable decisions taken by the SEC and Gensler have led to a strong sense of uncertainty in the American crypto market, fulfilling Ripple CEO Brad Garlinghouse’s ‘Crypto Exodus’ prediction. Garlinghouse pointed out that the lack of clear regulations put forth by the SEC regarding crypto has led to an unstable market and an endless cycle of legal litigations. As a result, the market is seeing major capital funds such as Andreessen Horowitz start searching for market opportunities overseas.

Gensler has also been criticized by fellow representatives on several occasions, for example, US Senator Bill Hagerty, who had tweeted , “The SEC is weaponizing their role to kill an industry. Allowing a company to list publicly and then stonewalling their attempts to register is indefensible.”

And, US Senator Cynthia Lummis, who tweeted  that “The SEC has failed to provide a path for digital asset exchanges to register, and even worse has failed to provide adequate legal guidance on what differentiates a security from a commodity”.

What Would Gensler’s Departure Mean For The US Crypto Market?

Gary Gensler has undoubtedly become the antagonist in the American crypto story, at least in the eyes of investors and exchanges. Should the SEC Stabilization Act bill gets voted in by Congress, the new executive director would be pressured into creating a new set of regulations that would favor the well-being of the US crypto market.

Such a bill would at least show investors that the US government is serious about addressing the issue of the lack of regulations and ambiguity regarding the definition of digital assets, according to the SEC. The response on Twitter to the tweet showing the hearing shows how stakeholders are more than happy about the bill introduced.