Ohio’s 8th District Representative, Congressman Warren Davidson, known for his pro-cryptocurrency stance, has announced his intention to introduce legislation that could lead to the removal of Gary Gensler, the chair of the US Securities and Exchange Commission (SEC).
This move follows the SEC’s plan to redefine what constitutes an “exchange.” Davidson’s statement was in response to a tweet by Coinbase’s legal chief, Paul Grewal.
Davidson stated:
“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).”
During an April 14 SEC meeting, Gensler proposed regulatory changes to redefine an exchange as a platform that “brings together buyers and sellers.” He believes these changes will improve investor protection by subjecting certain brokers to additional regulatory scrutiny and modernizing the rules defining an exchange.
The proposed regulation implies that Communication Protocol Systems could be considered exchanges, and even programmers who simply exchange code for crypto trade could be affected. If the SEC passes this proposal, decentralized exchanges (DEXes) like UniSwap and PancakeSwap would be required to register as exchanges, as the commission is signalling its intention to regulate them.
A new SEC proposal has a serious change hidden within its complex language.
Bottom line: The proposal violates the First Amendment by requiring a license to speak—even of open source developers. It’s unconstitutional and they should change it.
Coin Center is pushing back 👇 1/— Peter Van Valkenburgh (@valkenburgh) April 14, 2022
Interestingly, SEC Commissioner Hester Peirce, another pro-cryptocurrency voice, disagreed with the proposed amendments. She criticized the notion of stifling innovation, promoting centralization, encouraging companies to leave the US, and welcoming the extinction of new technology.
In addition to ironing this t-shirt (which republishes code from a comment letter), will I need to register as an exchange before wearing it? “It depends,” per the SEC’s latest release: https://t.co/mARz8FzNZD pic.twitter.com/xD7Lx2kJE6
— Hester Peirce (@HesterPeirce) April 14, 2023
Crypto advocacy groups had previously criticized similar amendments proposed in January 2022, arguing that the SEC had exceeded its jurisdiction and that the changes could have a negative impact on engagement in the crypto sector.
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