Congressman Warren Davidson and House Majority Whip Tom Emmer have introduced the SEC Stabilization Act, a bill that seeks to restructure the U.S. Securities and Exchange Commission (SEC) and remove its current Chairman, Gary Gensler.
This move comes in the wake of the SEC’s recent legal actions against major cryptocurrency exchanges Coinbase and Binance, which have sent shockwaves through the crypto industry and triggered a significant outflow of customer funds from both platforms.
Davidson and Emmer’s proposed legislation is a reaction to what they describe as a long series of abuses under the current SEC structure, particularly under Gensler’s leadership.
They argue that U.S. capital markets need protection from a “tyrannical Chairman,” and that the proposed bill is a measure to safeguard the best interests of the market for the years to come.
The introduction of the SEC Stabilization Act follows the SEC’s recently filed lawsuits against Coinbase and Binance, the world’s largest cryptocurrency exchanges.
The SEC accuses Coinbase of operating as a middleman on crypto transactions since at least 2019, evading disclosure requirements meant to protect investors. The SEC also alleges that Coinbase traded at least 13 crypto assets that are securities and should have been registered, including tokens such as Solana, Cardano, and Polygon.
Binance, on the other hand, is accused by the SEC of inflating trading volumes, diverting customer funds, improperly commingling assets, failing to restrict U.S. customers from its platform, and misleading customers about its controls.
Both Coinbase and Binance have experienced significant net customer outflows following the lawsuits, with estimated outflows of $1.28 billion and $790 million respectively
However, crypto companies refute the SEC’s definition of tokens as securities, stating that the SEC’s rules are ambiguous and that the SEC is overstepping its authority in trying to regulate them
