U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler could face job losses after U.S. Representative Warren Davidson announced he would pass legislation to fire the SEC chairman.
In an April 15 response to Coinbase legal head Paul Grewal, the crypto-friendly representative announced his intention to have Gensler removed following the SEC's recent announcement to review a proposed redefinition of "exchange." . "To correct a litany of abuses, I am introducing legislation to remove the SEC Chairman and replace him with an Executive Director who reports to the Board of Directors (the seat of power)," Davidson tweeted.
"The former chairman of the SEC is not qualified," he added.
Gensler told an April 14 conference that the proposed rule amendments could benefit investors and the market by subjecting certain brokers to additional regulatory scrutiny as well as “modernizing” rules that define exchanges. A similar amendment was proposed in January 2022. At the time, crypto advocacy groups said the SEC’s overreach could jeopardize participation in the space.
SEC Commissioner Hester Pierce, known as "Crypto Mom" for her pro-crypto stance, criticized the newly proposed rule amendments in a statement on April 14, declaring "stagnation, Centralization, expatriation, and extermination are the watchwords of the latest SEC move". “Instead of embracing the promise of new technologies as in the past, here we propose embracing stagnation, concentration of power, urging expatriation and welcoming the extinction of new technologies,” Pierce said. "Therefore, I disagree," she added.
According to Peirce, unlike the SEC in the past when it embraced new technologies, modern regulators have been expanding their scope to address problems that “don’t exist.” She further believes that the SEC has adopted the practice of refusing to change existing regulations in order to make room for new technologies and new ways of doing business.
"The commission today is telling entrepreneurs who are trying to do new things in our market to come in and register," Pierce said.
"When entrepreneurs find they cannot, the Commission rejects the possibility of actual adjustments to our registration framework to help entrepreneurs register, instead rewarding their good faith with enforcement action."
Peirce also accused the SEC of using the "notice and comment rulemaking process" as a threat. According to Peirce, the concept release should have been issued due to concerns about the ambiguity and scope of the newly proposed rule change and the SEC's "limited understanding" of the field.
"I wish we had done it differently," Pierce said. Over the past few years, the SEC has launched several high-profile actions against alleged violations by crypto companies such as Ripple, LBRY, and Coinbase.
It also took aim at staking and stablecoins, prompting some critics to argue that the SEC has been using enforcement actions to make laws on a case-by-case basis, rather than creating clear regulations.
