Rep. Tom Emmer of Minnesota’s 6th district recently sent a letter to Gary Gensler – Chairman of the Securities and Exchange Commission (SEC) – with critical questions about the authority’s crypto industry reporting requirements.
The letter is written on behalf of multiple blockchain firms that claim these requirements – framed as “requests” – aren’t exactly voluntary, and are stifling innovation.
Stifling the Crypto Sector
Sent on Wednesday, the letter was co-signed by seven other congressmen spanning across party lines. These include Darren Soto, Warren Davidson, Jake Auchincloss, Byron Donalds, Josh Gottheimer, Ted Budd, and Ritchie Torres – 4 Republicans, and 4 Democrats.
The letter suggests that the SEC has been inappropriately using its investigative powers in violation of the Paperwork Reduction Act. The act requires federal agencies to be “good stewards of the public’s time” and “not overwhelm them with unnecessary or duplicative requests for information”.
“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,” reads the letter.
It follows up with a list of 13 questions about how and why the SEC is soliciting information from various blockchain firms. This includes a request for the number of documents requests the SEC has sent to individuals and firms about their involvement with blockchain technology over the past five years.
It also asks if there is a limit to the number of related requests the SEC can make per year, and if the SEC has conducted a cost-benefit analysis on the efficacy of its requests.
“Crypto startups must not be weighed down by extra-jurisdictional and burdensome reporting requirements,” stated Emmer regarding the letter. “We will ensure our regulators do not kill American innovation and opportunities.”
Bipartisan Critique of Gensler
The letter demonstrates a refreshing wave of bipartisan defense for crypto, about which a clear divergence of opinion has formulated between parties. While many Republicans have been quick to support the industry’s growth across the U.S., Democrats have been more skeptical.
For example, the three U.S. senators that are known to own Bitcoin – Cynthia Lummis, Pat Toomey, and Ted Cruz – are all Republican. Meanwhile, Democratic senator Elizabeth Warren has been one of the loudest critics of cryptocurrencies, citing everything from their volatility to their use in criminal activity.
Even New York Democrat Eric Adams, who voluntarily received his first three paychecks in Bitcoin, has now stated that he doesn’t support crypto mining due to environmental concerns.