Republican lawmakers accuse SEC of restricting crypto exchanges in recent rulemakings

Two Republican lawmakers have taken issue with the Securities and Exchange Commission’s recent rule changes.

On April 18, Representatives Patrick McHenry (R-NC) and Bill Huizenga (R-MI) wrote to SEC Chair Gensler criticizing the commission’s recent rulemakings as they relate to crypto.

The two proposals in question — one from January and one from March — push for expanded definitions of terms that appear in the 1934 Securities Exchange Act. In general, the rulemakings seem to require crypto exchanges to register with the SEC as exchanges and market makers to register with the SEC as broker-dealers. 

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According to today’s letter in response to the rulemakings:

“The SEC fails to identify the problem that the rulemakings are intended to solve, particularly as it relates to requiring certain market participants facilitating digital asset transactions to register with the SEC.” The letter also criticizes the length of the rulemakings, saying: “We are concerned the proposed rulemakings total nearly 800 pages and include more than 300 questions for comments combined.”

McHenry and Huizenga both sit on the House Financial Services Committee, with McHenry serving as the top-ranking Republican on the overall committee. Several of their colleagues wrote to Gensler back in March over the SEC’s unofficial probes of a number of unnamed crypto companies. 

Earlier this month, Gensler called for greater oversight on the division of crypto firms’ different businesses.