Congress Members Challenge SEC Bitcoin and Crypto Requirements
On March 16th, 2022, Congressman Tom Emmer (R-MN) and seven other Congress Members sent a formal letter to the Securities and Exchange Commission and Gary Gensler (SEC chair) regarding their investigations on Bitcoin and cryptocurrency companies.
Emmer tweeted a thread stating that his office received word from a number of companies involved with Bitcoin and cryptocurrency services that the SEC is overburdening them with requests for information. In his attached letter, Emmer went on to say that the SEC staff can request documents but not in a manner that overwhelms the participants, according to the Paperwork Reduction Act (PRA).
The companies that have reached out to Emmer find the SEC requests to be unnecessary, redundant, bordering on involuntary, and stifling toward innovation.
The letter presents a number of questions to Gensler that are meant to shed light on why the SEC is soliciting information from these private Bitcoin and cryptocurrency firms.
Questions include:
- How many voluntary document requests has the SEC performed in the last five years?
- How many questions did the SEC ask these relevant entities?
- What is the average timeline for each company to respond?
- What are the expected compliance costs for each entity?
- Does the SEC have a cost-benefit analysis for these requests?
- Have any entities been penalized for not responding to these requests?
- Was it clearly stated that there will be penalties for not responding?
- Are entities made aware that an informal investigation is being conducted by the SEC before or after the first voluntary document request was sent?
- What proportion of hours are allocated to Bitcoin and cryptocurrency companies for these voluntary document requests?
- What criteria is being used to determine which companies are being contacted?
- Are these Bitcoin and cryptocurrency companies being made aware of the SECs intentions for collecting their information?
- Is there a limited number of requests that the SEC can make for each company?
- Has the SEC tested the method for collecting this information?
Emmer and the other congressmen hope this letter lend them an understanding of what the SECs intentions and processes are for obtaining information from Bitcoin and cryptocurrency firms.