United States Representative Warren Davidson has announced his intention to introduce legislation to fire Securities and Exchange Commission (SEC) chair Gary Gensler in response to the SEC’s recent announcement about revisiting the proposed redefinition of an “exchange.” Davidson declared on Twitter that he would replace the role of SEC Chairman with an Executive Director who reports to the Board, arguing that this move would correct a long series of abuses. However, he added that former Chairs of the SEC would be ineligible for the role.
Yep. To correct a long series of abuses, I am introducing legislation that removes the Chairman of the Securities and Exchange Commission and replaces the role with an Executive Director that reports to the Board (where authority resides). Former Chairs of the SEC are ineligible. https://t.co/VBnkgt8bhM
— Warren Davidson (@WarrenDavidson) April 16, 2023
SEC Commissioner Hester Peirce, known for her pro-crypto positions, criticized the proposed rule amendments, stating that “stagnation, centralization, expatriation, and extinction are the watchwords” of the SEC’s recent move. She argued that the regulator has been expanding its reach to solve problems that do not exist and that it has refused to alter current regulations to allow for new technologies and ways of doing business. Peirce further accused the SEC of using the “notice-and-comment rulemaking process” as a threat.
Peirce’s remarks follow Gensler’s statement on April 14, in which the SEC Chairman argued that the proposed rule amendments could benefit investors and markets by bringing certain brokers under additional regulatory scrutiny and “modernizing” rules that define an exchange. Similar amendments were proposed in January 2022, which crypto advocacy groups criticised as an overreach of the SEC’s authority.
In recent years, the SEC has taken enforcement action against several high-profile crypto companies such as Ripple, LBRY and Coinbase over alleged violations, as well as staking and stablecoins. Critics have argued that the regulator has been using enforcement actions to develop the law on a case-by-case basis rather than creating clear regulations.