- The Securities and Exchange Commission has proposed a rule that put barriers to the development of decentralized exchanges
- Lawmakers in the House Financial Services Committee have opposed this draft and asked the regulatory to annul it
The Securities and Exchange Commission has been at loggerheads with crypto firms lately. Now in the past too, the regulations have indicated that decentralized transactions have to be regulated. And though it sounds reasonable according to some, the actions proposed by the body deprive the blockchain of its fundamental capabilities.
SEC’s Attempt to cripple crypto
Recently, the SEC has proposed a bill that has drawn flak from political factions and the crypto community too. According to the Republicans, the draft aims at crippling the development of the digital asset industry. They said that the law targets decentralized firms and forces them to switch to centralized norms.
As per a group of lawmakers in the House Financial Services Committee, the bill talks about inducting a communication protocol system into the working of decentralized exchanges. Now, the inclusion of this mechanism alters the basic nature of blockchain functionality.
According to the legislators, the proposed rule does not just regulate the centralized digital asset platform but also affects their decentralized counterparts. They grumble that this curbs the power and efficiency of a large number of exchanges and other firms. Furthermore, it affects the consensus mechanism and development projects in the digital asset ecosystem too.
There are nearly 30 congresspersons who are opposing this draft and the name includes the likes of Warren Davidson, Tom Emmer, French Hill, and Patrick T. McHenry.
Political factions are supporting crypto
The set of people opposing this draft is saying that it has been affected by the views of the current chairperson of SEC Gary Gensler. The incumbent chair has expressed many times that the centralized and government-owned currencies are sufficient for the economy. According to many of them, he has openly downplayed the significance of decentralized technology without even trying to understand it according to many of them.
The distinguished lawmakers also accused him of outflanking Congress. They say that they’re associated with the House Agriculture Committee and working in collaboration to frame a law to regulate digital assets.
Representatives of both houses have introduced the bill to regulate crypto. This proposed draft also includes classifying cryptocurrencies as commodities and securities. It would also bring forth norms that will regulate exchanges and their work.
The House Financial Services Committee chair McHenry said that he hopes to table the draft by mid-July.
However, he said that it is just a draft and will be discussed by the congress. We have plenty to think about the pros and cons of the bill before implicating it. Also, he urged the committee to come up with a certain view regarding this legislation before the House resumes on July 4.
It’s not SEC vs. crypto exchanges anymore, the political factions are also favoring cryptocurrency now. However, we’ll have to see how the government perceives this technology. The state would certainly not like to lose control over the currency and this could compromise the blockchain.