By Suzanne Cosgrove
In a brief but fiery speech to pitch his amendment to the Appropriations Act to House members, Congressman Tom Emmer declared that “regulation by enforcement is a practice all too common with this administration.” Emmer was particularly damning when he referred to SEC Chairman Gary Gensler, calling him “ineffective and incompetent.”
H.R. 4664 allocates funding for financial services and general government for fiscal year ended September 30, 2024. Emmer’s one-sentence addition to the Act states that “none of the funds made available by this Act may be used by the Securities and Exchange Commission to carry out an enforcement action related to a crypto asset transaction.”
“My amendment seeks to put an end to Chair Gensler’s pattern of regulatory abuse, a pattern that is crushing American innovation and capital formation, without undermining our ability to go after criminals and fraudsters,” Emmer said. “Specifically, my amendment prohibits the SEC from using funds for enforcement activities related to digital asset transactions until Congress passes legislation that gives the SEC jurisdiction over this asset class.”
Deadline redux. Although Congress is facing an imminent U.S. budget deadline, House members, including Emmer, this week tinkered with the appropriations measure, which has some 100 amendments to its spending package, including the one that prohibits the SEC from using funds for enforcement activities related to digital assets. Any spending proposals also would have to be passed by the Senate.
U.S. government services will be interrupted if Congress does not pass a budget bill or another stopgap spending package by Nov. 17. Congress last averted a government shutdown less than two months ago, in October, when it pushed through a 45-day stopgap spending measure.
Crypto defender. In his remarks made Wednesday on the House floor, Emmer cast himself as a backer of the nascent digital asset scene. “The unique characteristics of digital assets make it hard to fit this asset class into any existing regulatory framework,” he said. “That doesn’t mean crypto is up for grabs by whatever federal bureaucratic agency has the most taxpayer-funded enforcement resources to burn.”
He said Congress is working on legislation to establish a framework for how specific digital assets are classified, as a security or a commodity, which will dictate the regulator of jurisdiction.
“Chair Gensler has developed a track record of going after actors like Coinbase, a publicly traded company desperately trying to survive and innovate right here in the United States instead of going offshore like many are forced to do,” Emmer said. “Gensler has done this while missing the bad actors, like FTX and Terra/Luna.”
Enforcement alternates. And while Emmer ruled out the SEC’s enforcement efforts, he said the Department of Justice, the Treasury, and the Office of Foreign Asset Control “have the existing and sufficient authority” to prosecute criminal acts of fraud.
“This (amendment) will keep Chair Gensler … in check while Congress continues working to give this industry a chance to grow and develop right here in the United States,” Emmer said. “Congress will hold unelected bureaucrats accountable,” he said.