- The Blockchain Association has called on SEC Chair Gary Gensler to recuse himself from digital asset-related enforcement decisions, citing perceived bias and overstepping of bounds.
- The advocacy group criticizes Gensler for repeatedly asserting that all digital assets except Bitcoin should be classified as securities, which they claim shows a failure to consider the specifics of each case.
- The Association accuses the SEC under Gensler’s leadership of not providing clear regulatory frameworks and guidelines, instead opting for heavy-handed enforcement actions.
In a series of bold and unambiguous statements, the Blockchain Association, a prominent crypto advocacy firm, has called on SEC Chair Gary Gensler to recuse himself from digital asset-related enforcement decisions, suggesting he’s overstepped his congressionally-granted boundaries.
In an open letter published on June 29, 2023, the Association expressed its concerns over Gensler’s perceived bias against the crypto industry and what it views as the SEC’s failure to fulfill its duties under his leadership. The principal bone of contention here is Gensler’s repeated assertion that all digital assets, except Bitcoin, should be classified as securities – a stance that the Blockchain Association claims evidence of a failure to engage with the specifics of individual cases.
Questioning the Regulator’s Approach
The Association’s criticism doesn’t stop there. It accuses the SEC of needing to adequately create rules and guidance to determine the application of securities laws to various crypto products or services. This failure, they argue, leaves investors, entrepreneurs, and the public uncertain about the legal standing of their crypto ventures.
This isn’t the first time Gensler’s oversight has come under scrutiny. Earlier this year, following an interview with the New York Magazine in which Gensler reiterated his “everything other than Bitcoin is a security” stance, token issuers Ripple and LBRY requested that Gensler be disqualified from future legal proceedings. They contended that Gensler’s preconceived notions about crypto assets could unfairly influence legal proceedings.
Demands for Regulatory Clarity
Further adding to the chorus of discontent, Jake Chervinsky, Blockchain Association Chief Policy Officer, commented that the digital assets industry cannot expect a fair assessment from Gensler and called for Gensler to step back from all decisions related to digital asset enforcement matters.
The Blockchain Association’s position is that Gensler’s stubborn view toward digital assets compromises the SEC’s ability to act as a rule-making body for the digital asset space. They argue that his prejudiced view that all digital assets except Bitcoin are securities makes him incapable of providing a fair hearing, thus violating the due process rights of individuals and companies.
The crypto advocacy group argues that, instead of providing clear regulatory frameworks and guidelines, the SEC, under Gensler’s leadership, needs to be more moderate, preferring enforcement action over clarity. It is worth noting that many major players in the digital asset market, including Binance, Coinbase, and Ripple, are engaged in legal battles with the SEC, underlining the industry’s ongoing demand for clear regulatory guidelines.
The call from the Blockchain Association represents a key moment in the complex relationship between crypto market participants and regulators. By calling for Gensler to step back, the Association is spotlighting the growing need for transparent and well-informed regulation that protects investors and fosters innovation in this rapidly evolving industry. However, only time will tell whether this call will result in meaningful regulatory changes or deepen the regulatory divide.
