8 Congress Members Ask SEC for Details on Crypto Company Investigations

The bipartisan group led by Rep. Tom Emmer wants to ensure regulators do not stifle American innovation by imposing burdensome reporting requirements on crypto startups.

AccessTimeIconMar 17, 2022 at 1:31 p.m. UTC
Updated Mar 18, 2022 at 3:28 p.m. UTC

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.

U.S. Rep. Tom Emmer (R-Minn.) and seven other members of Congress have sent a letter to U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler asking for answers around the probing of crypto companies. The letter was dated March 16 and posted on Twitter by Emmer.

The questions asked were about the SEC’s use of authorities in its Division of Enforcement and Division of Examination to obtain information on digital asset and blockchain firms.

"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 investigation,” the Congress members wrote.

The members said they had reason to believe the requests might be at odds with the Paperwork Reduction Act and noted that “federal agencies must be good stewards of the public’s time, and not overwhelm them with unnecessary or duplicative requests for information.”

The letter then asked a series of 13 detailed questions about document requests the SEC has made of cryptocurrency industry participants, the number of questions in them and how much time companies were given to respond to them. They also asked what the expected compliance costs were to respond to these requests.

“Crypto startups must not be weighed down by extra-jurisdictional and burdensome reporting requirements. We will ensure our regulators do not kill American innovation and opportunities,” Emmer wrote in a tweet accompanying the letter.

The congress members called for their queries to be answered no later than April 29.

The letter’s other signees were Rep. Darren Soto (D-Fla.), Rep. Warren Davidson (R-Ohio), Rep. Jake Auchincloss (D-Mass.), Rep. Byron Donalds (R-Fla.), Rep. Josh Gottheimer (D-N.J.), Rep. Ted Budd (R-N.C.) and Rep. Ritchie Torres (D-N.Y.). Apart from Donalds, all are members of the Congressional Blockchain Caucus.

More clarity on how regulators should be dealing with crypto firms is coming. U.S. President Joe Biden signed an executive order two weeks ago that called for all federal agencies to coordinate their approach to crypto.

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Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.

CoinDesk - Unknown

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.

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