Senator Emmer says SEC is ‘politicizing enforcement, baiting companies’
U.S. Congressman Tom Emmer Accused The Security Exchange Commission (SEC) says it will crack down on companies outside its jurisdiction.
🚨 SEC Executive Director acknowledges that the SEC is cracking down on companies outside its jurisdiction. Absolutely unacceptable. pic.twitter.com/wRQU54Ov6v
— Tom Emmer (@RepTomEmmer) July 19, 2022
In a hearing of the Investor Protection Subcommittee on July 19, Gurbir Grewal, Executive Director of the SEC, confirmed that the Commission operates routinely outside its jurisdiction.
SEC operated outside the jurisdiction
Senator Emmer asked how the SEC would react to crypto companies that did not respond to the industry sweep letter from the Commission.
Sweep letters require companies to voluntarily provide information to regulators.
Director Grewar replied that regulators could “subpoena and then execute the subpoena.”
According to Grewar, the SEC “is not limited by the jurisdiction in collecting evidence. We follow evidence wherever it guides us.”
Grewar’s statement elicited a bitter reaction from Emmer, who stated that the Commission was using its executive department to expand its jurisdiction.
According to Emmer, the SEC is not interested in clarifying whether crypto is under its jurisdiction, as seen in the dissolution of FinHub, the SEC arm focused on creating crypto regulations.
Instead, the SEC under Gary Gensler “is keen to use enforcement to unconstitutionally extend its jurisdiction and scale its crypto enforcement department.”
Emmer continued that the SEC “deterred sincere cooperation” by “politicizing regulations, encouraging companies to” participate and discuss “in the committee, and then take enforcement action.”
Another lawmaker, Brad Sherman, criticized the Commission for failing to take enforcement action on the major exchanges promoting Ripple (XRP) trading.
SEC fails cryptographic regulatory approach
The SEC has been criticizing its approach to cryptographic regulation.
SEC Commissioner Hester Peirce has criticized the financial regulators’ approach to regulating crypto space.
According to Perth, one-off enforcement measures are not the right way to build an industry framework.
Apart from that, some industry players also Criticized Regulatory regulation by enforcement tactics.
