SEC Leaders Clash Over Regulation of Digital Assets During House Hearing

SEC Leaders Clash on Digital Assets Regulation

A Republican commissioner at the Securities and Exchange Commission (SEC), Hester Peirce, criticized the agency's work under Democratic Chair Gary Gensler during a recent joint appearance before Congress. Peirce highlighted issues with the SEC's approach to digital assets, stating, "we've taken a legally imprecise view to mask the regulatory lack of clarity." This comment underscores frustrations within the industry.

Legal Framework and Industry Frustrations

Commissioner Gensler defended the SEC's use of the Howey Test to determine whether digital assets are securities, asserting it remains clear. However, industry voices complain about ongoing uncertainties in compliance. Republican lawmakers echoed Peirce's sentiments, pointing out inefficiencies in Gensler's regulatory approach, which they argue fails to protect investors adequately.

• New Frameworks Proposed: The GOP-led effort in the House to establish regulatory clarity for digital assets through the Financial Innovation and Technology of the 21st Century Act (FIT21) passed with bipartisan support.
• Commissioners Together: Despite differences, commissioners united around the importance of preserving U.S. capital markets.