A U.S. lawmaker has accused the U.S. Securities and Exchanges Commission (SEC) of trying to jam crypto companies into a violation.
SEC Subpoenas Outside Jurisdiction
The SEC is under fire again. A comment from an SEC official about issuing subpoenas to crypto companies and individuals outside its jurisdiction drew the ire of Rep. Tom Emmer in court. The Director of SEC Division of Enforcement, Gurbir Grewal, was asked how the SEC would react if a crypto entity outside its jurisdiction did not respond to a sweep letter. (A sweep letter refers to a written request from the regulators for a company to voluntarily submit certain documents.) Responding to the query, Grewal affirmed that in such cases, the agency often issues subpoenas followed by a subpoena enforcement action, even when the said entity falls outside their jurisdiction. Grewal even claimed that the agency does not consider jurisdiction limits when collecting evidence.
Rep. Accuses SEC Of Baiting
In response to Grewal’s statement, Rep.Emmer strongly condemned the SEC’s actions, declaring that it is a move to force the companies into violations. He accused the SEC of trying to create a ‘bloodbath’ for the companies that do not respond. His exact words were,
“The SEC is hellbent on expanding the size of its crypto enforcement division, using enforcement to unconstitutionally expand its jurisdiction. Under Chair Gensler, the SEC has become a power-hungry regulator, politicizing enforcement, baiting companies to ‘come in and talk’ to the Commission then hitting them with enforcement actions, and discouraging good faith cooperation.”
SEC Vs. Ripple: Lawyer Slams “Power Hungry” SEC
The regulatory body is not faring well in its legal battle against Ripple Labs. Lawyers, judges, and other lawmakers have called its actions in court several times. An attorney representing 68,700 XRP holders in the legal battle, John E. Deaton, attacked the regulator’s accusations against the crypto company. Deaton accused the SEC of initiating pointless legal action against Ripple, despite knowing that XRP was not a security and instead just a digital currency.
Deaton reasoned that the case against Ripple was formed to set a premise for regulating all crypto entities. He said,
“If this premise is accepted by the Court, it would empower the SEC to regulate a vast number of parties not included in this case, including digital asset exchanges, vendors, and retail holders…SEC’s overreach threatens the interests of not only XRP holders, but the exchanges and businesses utilizing XRP, and it implicates all other crypto assets.”
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