Republican Congressman Demands Clarity From the SEC on Crypto Regulation

Rep. Patrick McHenry (R-N.C.), the top Republican on the House Financial Services Committee, is urging the U.S. Securities and Exchange Commission (SEC) to provide clarity and consistency in its plans for crypto regulation.

In a letter to SEC Chairman Gary Gensler on Tuesday, McHenry laid out a timeline of Gensler’s public statements on the SEC’s role in the regulation of crypto exchanges and stablecoins, which he describes as “concerning and apparently self-contradicting.”

McHenry’s letter to Gensler comes hours in advance of the committee’s oversight hearing of the SEC, during which several committee members are expected to ask Gensler about crypto regulation.

Crypto has come up in several recent hearings with Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen, but Tuesday’s hearing is the first chance a committee in Congress has had to question Gensler in weeks. Tuesday’s hearing is also the first oversight hearing focused solely on the SEC. Previous hearings where members of Congress could question Gensler were focused on other topics like the GameStop trading frenzy.

Gensler’s stance on crypto regulation has seemingly intensified since his Senate confirmation to head the SEC in April. In May, Gensler told the members of the House Financial Services Committee that “it’s only Congress that could really address [the regulation of crypto exchanges]” and that there was “no federal authority to actually bring a regime to the crypto exchanges.”

Gensler has indicated in several hearings and interviews that the SEC already has the authority it needs to regulate crypto exchanges and stablecoins. In a September interview with the Washington Post, Gensler said that most cryptocurrencies have the attributes of securities, and he urged crypto exchanges to register with the SEC.

Gensler has also indicated that the SEC has authority over stablecoins. In the Post interview, he said the SEC is working with banking regulators to get expanded authority from Congress to regulate stablecoins.

A presidential advisory group led by the Treasury Department is expected to release its report on stablecoins in late October, which will call on Congress to enact a special purpose bank-like charter for stablecoin issuers.