Republicans Call On SEC Chair Gensler For Clear Digital Asset Rules

Key Points:

• Republicans criticize SEC Chair Gensler’s digital asset regulation approach, calling for clear rules that foster innovation and protect investors.
• The NSE framework is ill-suited for digital asset trading platforms, unable to accommodate many digital asset features.
• Clear rules of the road are needed to ensure innovators and investors have the regulatory clarity and protections they need.

All Republicans on the House Financial Services Committee criticize SEC Chair Gensler’s approach to digital asset regulation, urging him to work with Congress to develop clear rules for digital assets that foster innovation and protect investors.

The recent letter sent by all Republicans on the House Financial Services Committee to SEC Chair Gary Gensler criticizes the Commission’s approach to digital asset regulation, stating that it forces digital asset trading platforms to “come in and register” under an ill-fitting national securities exchange framework.

As Chair, you have acknowledged that digital asset trading platforms do not perfectly fit under existing laws and regulations. You have been outspoken in your push for digital asset trading platforms to ‘come in and register’ under the national securities exchange (NSE) framework.

Stated in the letter

The Republicans have urged Chair Gensler to work with Congress to develop clear rules of the road for digital assets that foster innovation and protect investors.

The letter highlights how the existing regulations under the NSE framework do not contemplate the features of many digital assets. These assets are developed for the purpose of being used within a developing system, are capable of being used in non-securities transactions, and are meant to be consumed and used in the protocol for which they were designed. The inability to register makes the current NSE framework ill-suited for digital asset trading platforms, as it can only list securities offered in compliance with securities laws.

Furthermore, the SEC’s lack of clarity on what digital assets are considered securities also limits what an NSE can list. The letter calls for clear rules of the road that ensure innovators and investors have the regulatory clarity and protections they need.

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