Rep. Tom Emmer (R-MN) sharply criticized Securities and Exchange Commission (SEC) Chair Gary Gensler in a speech on the House floor that condemned the agency’s approach to regulating digital assets.

Emmer said Gensler had “proven himself to be ineffective and incompetent” through his aggressive enforcement actions while stressing that regulation was the preview of Congress.

Rep. Emmer claimed that under Gensler’s leadership, the SEC has “pursued dozens of enforcement actions against the digital asset industry, despite never finalizing a single rule or regulation for the industry to follow.” He contended that by refusing to provide clear criteria on which digital assets would be considered securities, Gensler and the SEC have left the industry unable to comply with rules that do not exist.

Overreach

Rep. Emmer has been a vocal supporter of the crypto industry and critic of the SEC’s approach to regulation under Gensler. The congressman has repeatedly accused the SEC of overreach by pursuing enforcement actions against crypto firms without providing clear guidance.

Emmer contrasted the SEC’s enforcement actions against companies like Coinbase, a publicly traded crypto exchange operating in the U.S., with its failure to stop “bad actors like FTX and Terra-Luna” stating this demonstrated ineffective leadership. He asserted that as Congress works on legislation to establish a crypto asset framework, Gensler should not be allowed to “crush American innovation and capital formation” through overreaching enforcement.

To curb the SEC’s overreach, Emmer plans to introduce an amendment prohibiting the agency from using taxpayer funds for crypto enforcement until legislative guidelines are in place. However, while this would restrict Gensler, Emmer stressed it would not prevent prosecuting criminal fraud and abuse, citing the authority and resources of the Justice and Treasury Departments to prosecute wrongdoers.

While Emmer’s proposal faces challenges passing the Democrat-controlled House, his speech signals Republican lawmakers plan to pressure the SEC over crypto regulation. Gensler has defended the SEC’s actions as protecting investors from unregistered securities offerings.