Ohio Congressman Warren Davidson has suggested that Congress should support his proposal to remove Gary Gensler as chairman of the US Securities and Exchange Commission (SEC). This came in response to the regulator's dual filing of a lawsuit against cryptocurrency exchange Kraken over the past 10 months.
The SEC recently filed its second lawsuit this year against Kraken, accusing the platform of operating as an unregistered securities exchange, broker, dealer and clearing agent.
Earlier in February, charges were filed over the exchange's deposit-taking programme, which led to a settlement with the SEC and a $30 million fine paid by Kraken.
Jesse Powell, one of the co-founders and former CEO of Kraken, voiced his displeasure, saying that the SEC has started going after them again even though the company had already settled for $30 million in February. He said that such a move by the SEC creates an environment where it is difficult for a company to plan its actions without knowing what may follow.
Commenting on Powell's words, lawyer John Deaton said that the SEC under Gensler is acting dishonestly and negligently. He noted that paying a $30 million fine does not guarantee that the regulator will not come back for more.
Deaton cited the example of Ripple CEO Brad Garlinghouse, who spent more than $150 million in legal fees in his case.
The parallel compares the SEC's behaviour to the tactics of traffic police in Russia, where cameras are installed to fix speeding violations on a short stretch of road. This method is accused of targeting multiple fines for the same offence rather than road safety.
Similarly, the SEC's approach to cryptocurrency exchanges has been criticised for harsh fines and prosecutions to exclude almost all cryptocurrency exchanges from the country, leaving only Coinbase approved. This raises doubts that a change in leadership at the SEC will lead to a change in this policy.
It is important to note that even if a cryptocurrency exchange is registered outside of the U.S., the SEC can take action against it, as it did with Binance, creating uncertainty and risk for companies in the industry.