US Approach is ‘Different’ from Banning Crypto, Congressman Tells Gensler to ‘Step out of’ Crypto’s Way

Meanwhile, a top Republican in the House of Representatives is proposing a safe harbor bill, “Clarity for Digital Tokens Act of 2021,” to “provide the necessary legal certainty to digital asset projects when they launch.”

US Securities and Exchange Commission (SEC) Chairman Gary Gensler said on Tuesday that the government has no plans to ban crypto-like China. These comments echoed Federal Reserve Chairman Jerome Powell’s remark on the congressional hearing from last week when he said they have “no intention to ban them.”

The government’s focus is rather on ensuring that the crypto industry adheres to tax laws, anti-money laundering regulations, and investor and consumer protection rules, Gensler said at a House hearing.

On being asked if China-like prohibition was on the table in the U.S., Gensler said, “Our approach is really quite different.” He then added that any ban would have to be legislated by Congress.

While no intention to ban, SEC isn’t taking a friendly approach to this new technology either.

Gensler, Step Out of the Way

Congressman Tom Emmer took to Twitter late on Tuesday to criticize Gensler for considering most cryptocurrencies to be securities. He said the SEC’s approach to crypto is “harmful” to everyday investors.

Even if a token issuer registers it as a security with the SEC, it doesn’t help anyone because the token can’t be traded on the NYSE or NASDAQ or even through a broker-dealer like Charles Schwab Emmer said.

Additionally, if these coins with a $1 billion market cap and tens of thousands of investors are deemed a security by Gensler, the value of these tokens will plummet and negatively affect the retail investors.

“Clearly there is no path for digital asset securities to be traded anywhere, so it is clear that retail investors would be hurt by Gensler’s actions. Gary Gensler, step out of the way.”

Clarity for Digital Tokens Act

In other news on the regulatory front, Rep. Patrick McHenry (R-N.C.), the ranking member on the House Financial Services Committee, has unveiled a safe harbor bill ahead of a committee hearing with Gensler.

The “Clarity for Digital Tokens Act of 2021” follows SEC Commissioner Hester Peirce’s Token Safe Harbor proposal she made in 2020 and 2021.

Echoing Peirce’s views, the Act addresses when crypto startups would have to register and how to verify that their projects do not meet the federal definition of security.

“Unfortunately, our current regulatory framework threatens to push this technology – and the jobs created by this rapidly growing industry – overseas,” McHenry said in a statement.

“My bill, which builds on the great work of SEC Commissioner Hester Peirce, will help provide the necessary legal certainty to digital asset projects when they launch.”

The bill also covers a number of provisions about businesses needing to share information about transactions and secondary platforms to trade those tokens and those trying to launch an ICO to warn investors about the “high degree of risk and the potential loss of money” when purchasing the tokens.

“We commend Patrick McHenry’s efforts to outline a clear safe harbor process for innovators to work *with* regulators to build the future of finance and protect consumers,” said Blockchain Association.