US Congressman calls SEC Chair Gary Gensler “rogue regulator”

John
Rose,
US
Representative
serving
Tennessee’s
Sixth
Congressional
District,

is
strongly
critical
of
the
US
Securities
and
Exchange
Commission’s
(SEC)
action
against
Robinhood.
The
Congressman
called
the
SEC
and
its
Chair,
Gary
Gensler
“rogue
regulators”
in
a
recent


post
on
X.

According
to
him,
the
federal
agency

went
beyond
its
intended
role
of
protecting
investors
and
maintaining
fair
markets.
He
believes
that
instead
of
stifling
innovation,
the
SEC
should
prioritize
investor
protection.

“The
[SEC]
exceeded
its
mandate
to
protect
investors
and
maintain
fair,
orderly
markets
by
issuing
a
Wells
Notice
to

[Robinhood
App],
a
precursor
to
enforcement
action,”
the
Congressman
criticized.

“I’m
proud
to
help
lead
the
effort
to
provide
clarity
by
passing
the
FIT
for
the
21st
Century

Act
so
that
rogue
regulators
like
[Gary
Gensler]
can
focus
on
their
mandate
to
protect
investors
and
not
disrupt
innovation,”
he
added.

The
SEC
is
under
fire
after
threatening

enforcement
action
against
Robinhood’s
crypto
arm.
Rose
is
among

a
number
of
high-profile
figures
to
have
voiced
strong
opposition
to
the
agency’s
move.

Jake
Chervinsky,
Chief
Legal
Officer
at
Variant,
also

took
to
X
to
express
his


perspective.

The
SEC
has
issued
an
unusually
high
number
of

Wells
Notices
related
to
crypto
in
recent
months.
However,
Chervinsky
believes
the
SEC
is
misusing
the
Wells
Notice
process
by
using
it
as
“a
scare
tactic”
to
pressure
companies.

“The
number
they’ve
sent
about
crypto
in
recent
months
is
astonishing.
It’s

hard
to
imagine
that
they
would
(or
could)
bring
so
many
enforcement
actions
at
once,”
Chervinsky
stated.
“It
seems
like
they’re
abusing
the
Wells
process
as
a
scare
tactic
now.”

“If
the
SEC
brings
as
many
enforcement
actions
as
it
has
sent
Wells
notices,
it
will

be
in
flagrant
violation
of
both
the
law
and
its
Congressional
mandate.
If
not,
it’s
clearly
abusing
the
Wells
process
to
get
free
discovery
and
terrorize
upstanding
US
companies,”
he
added.

Chervinsky
argued
that
the
SEC
is
focusing
too
heavily
on
crypto
regulation,
neglecting
its
core
responsibility
of
regulating
traditional
equity
and
debt
markets.
He
noted
that
this
focus
is
a
waste
of
taxpayer
resources
that
could
be
better
spent
on
the
agency’s
core
duties.

“The
SEC
allocates
a
grossly
disproportionate
amount
of
its
resources
to
crypto,
given
that
its
actual
purpose
is
to
regulate
equity
and
debt
markets.
Every
minute
and
taxpayer
dollar
spent
on
crypto
is

one
not
spent
on
the
real
mission
that
Congress
created
the
SEC
to
pursue,”
Chervinsky
stated.

Under

the
leadership
of
Chairman
Gary
Gensler,
the
SEC
has
been
actively
pursuing
legal
actions
against
a
range
of
prominent
individuals
and
organizations
within
the
industry.

Following
lawsuits
against
three
leading
crypto
exchanges—Coinbase,
Kraken,
and
Binance—the
SEC
continues
to
expand
its
targets
to
include

new
crypto-related
entities
such
as
Consensys,
Uniswap
Labs,
and
Robinhood.

Ripple
Labs,
a
previous
major
target
of
the
SEC,
has
been
one
of
the
few
entities
to

achieve
a
partial
victory
against
the
agency.