This week, several members of Congress wrote to the SEC asking it to provide more clarity and guidance to cryptocurrency and blockchain companies before resorting to enforcement actions. Tom Emmer tweeted the following: “My office has received numerous tips from crypto and blockchain firms that SEC Chair @GaryGensler’s information reporting “requests” to the crypto community are overburdensome, don’t feel particularly… voluntary… and are stifling innovation.” (Emmer’s Tweet)
According to the letter, which posed 13 questions for the SEC to answer, “It appears there has been a recent trend towards employing the Enforcement Division’s investigative functions to gather information from unregulated cryptocurrency and blockchain industry participants in a manner inconsistent with the Commission’s standards for initiating investigations.” In other words, the SEC has been using its enforcement arm in scenarios where notice and comment rule making or subregulatory guidance are more appropriate. (View the letter here)