United States Congressman Tom Emmer and other congresspeople have sent a bipartisan letter to the United States Securities and Exchange Commission (SEC) about its crypto investigations. The representatives want clarification on the SEC’s information-seeking process.
United States Congressman Tom Emmer, who serves in Minnesota’s Sixth District, sent a bipartisan letter to the United States Securities and Exchange Commission (SEC) Chair Gary Gensler regarding its crypto investigations. He asked for clarity on the SEC’s information-seeking process with respect to its examination of crypto startups and blockchain firms. The letter was signed by several members of congress.
Specifically, Emmer was asking about the utilization of resources from the Division of Enforcement and the Division of Examination to obtain information. He said that those authorities are better suited to “the SEC’s divisions charged with seeking public commentary as part of the rulemaking process.”
Emmer said that 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 for initiating investigations.”
To that end, he said that the request could be in conflict with the Paperwork Reduction Act. With respect to this act, the information requests could result in the overwhelming of the departments because of unnecessary or duplicative requests for information.
The congresspeople provided a list of several questions that it expects the SEC to answer by April 29. These relate to the number of document requests, cost analyses, and the general utilization of resources.
SEC heavily scrutinizing crypto market
The SEC has been increasingly paying attention to the crypto market in the past 24 months, recently charging the Ormeus Coin founders in a $124 million fraud case. To its credit, the crypto market has been subject to a lot of hacks and scams, and the SEC does not want consumers to be affected any further. However, some projects feel as if they are being unfairly targeted.
The SEC’s main gripes with the crypto market have to do with the fact that some projects may be violating securities regulations. The ongoing Ripple case, for example, is one of the most high-profile of investigations, and Ripple is staunchly fighting back.
While the financial authority has been investigating certain companies, it has also been stalling on bitcoin ETF applications. The purported reason is that it does not want more risk on investors, but supporters of ETFs argue that it will bring more regulation and legitimacy to the market, thereby increasing investor protection.
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