Republican senators are aligned with Securities and Exchange Commission Chairman Gary Gensler about inaccurate statements the agency made in his lawsuit against cryptocurrency startup DEBT Box.
Representatives Cynthia Loomis of Wyoming, Bill Hagerty of Tennessee, Katie Boyd-Britt of Alabama, Thom Tillis of North Carolina, and J.D. Vance of Ohio said the SEC’s handling of the case was in line with its mission to protect investors and maintain fair markets. “It has become endangered,” he said. Letter sent to Gensler on Wednesday.
“We are deeply concerned by the Commission’s actions in this case,” they said in the letter. “It is unconscionable that any federal agency, especially one that regularly engages in highly significant legal proceedings and which, under your leadership, has pursued its regulatory mission through enforcement actions rather than rulemaking, can operate in such an unethical and unprofessional manner.”
The SEC sued first. Last July, Digital Licensing Inc., doing business as DEBT Box, defrauded thousands of investors out of at least $49 million by offering customers so-called “node licenses” that allowed them to mine 11 tokens for profit. However, the token has not been mined.
The agency later said in late December that it had made inaccurate statements and had “fallen short” of its expectations of being accurate and candid in court. Judge Robert Shelby of the U.S. District Court in Utah criticized the agency’s lawyers and made “false or misleading” statements to the SEC after they claimed the company was trying to move assets overseas to escape the regulator’s jurisdiction. ordered to explain.
plans to dismiss the case
The SEC told the court last week that it plans to dismiss the case against DEBT Box without prejudice, meaning the SEC could still refile the case.
“R“Whether Commission staff intentionally misrepresented evidence or unknowingly presented false information, this case suggests that other enforcement cases brought by the Commission may be worthy of investigation,” the senators wrote. The letter said: “It is difficult to remain confident that this is not the case in other cases. “It is premised on vague evidence, obfuscation, or outright misrepresentation.”
The SEC did not immediately respond to a request for comment.
The American Securities Association, a trade group representing regional financial services companies, also criticized the SEC’s handling of the case.
“The SEC Commissioner of Enforcement has their trust and confidence, and the American people expect him to demonstrate the highest ethical and moral conduct,” ASA CEO Chris Iacovella said in a statement. “The Department intentionally misled federal courts to pursue a political agenda against industries the SEC did not like.”
Many Republicans in Washington have been critical of Gensler’s approach to cryptocurrency regulation. Gensler said many cryptocurrencies are securities and has sued large cryptocurrency exchanges that require them to register with the agency.
Senator Hagerty, who signed the letter this week, said Gensler’s “posture” was: harmful To the industry. Others are preparing legislation to regulate the industry, including one focused on stablecoins. Maxine Waters, California’s top Democrat on the House Financial Services Committee, said: Politico Negotiators on Wednesday said they were “very, very close” to an agreement on stablecoin legislation after talks broke up over the summer. all supply This allows state regulators to approve stablecoin issuance without input from the Federal Reserve.
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