epublican Senator Tom Emmer has questioned the public's confidence in the United States' financial system. He said that the SEC blamed the decline in trust on "industry participants and companies."
He charged the agency with using enforcement to broaden its jurisdiction at the expense of public resources and trust, particularly in the digital asset industry.Senator Emmer released a video of his conversation with financial regulator directors on July 19.
SEC wants control
Senator Emmer asked SEC Enforcement Director Gurbir Grewal about "industry sweeps" and received confirmation that they do happen. Grewal refused to discuss current industry sweeps, citing SEC policy.
The Enforcement Director also admitted to making "extrajudicial requests" on companies that are not subject to SEC jurisdiction.
Senator Emmer also stated that SEC Chair Gary Gensler has directed the enforcement division to send "sweep letters" to a specific sector of the cryptocurrency community to "jam them into an alleged unconstitutional violation."
According to the SEC, those who fail to respond to presumably voluntary information requests will face a "bloodbath," and Senator Emmer has accused the agency of dissolving the division charged with developing crypto regulations.
"The SEC is hellbent on growing the size of its crypto enforcement division by using enforcement to unconstitutionally expand its jurisdiction," he continued.
Lummis-Gillibrand's bill is in a state of uncertainty
The proactive Lummis-Gillibrand bill, which was introduced last year, is unlikely to be voted on this year. Senator Lummis told Bloomberg on July 19 that the bill's broad scope may make it difficult for lawmakers to digest quickly. As a result, it's unlikely that the Senate will vote on it before the end of 2022.
Gary Gensler has repeatedly slammed the bill, claiming that it jeopardizes the $100 trillion traditional finance sector. He wants the SEC to have sole authority over digital assets so that he can regulate them in the same way that he does securities and stocks.
The major bipartisan cryptocurrency bill spearheaded by U.S. According to the duo, Senators Cynthia Lummis (Republican) and Kirsten Gillibrand (Democrat) will be deferred until next year.
Lummis also mentioned the $40 billion Terra ecosystem collapse in May and the risky nature of algorithmic stablecoins, which necessitates additional oversight.
The statements were made in response to the recent bankruptcy proceedings of cryptocurrency lending firms such as Celsius and Voyager, which put users at risk of losing their deposited assets on those platforms.