The U.S. Securities and Exchange Commission (SEC) is under fire after its recent threats of legal action against Robinhood's cryptocurrency division drew sharp criticism from political and industry figures.

U.S. Representative John Rose labeled the SEC and its Chair, Gary Gensler, as 'rogue regulators', accusing them of overstepping their regulatory mandate.

Congressional Critique

"The [SEC] exceeded its mandate to protect investors and maintain fair, orderly markets by issuing a Wells Notice to [Robinhood App], a precursor to enforcement action," Rose stated.

His critique underscores a growing concern that the SEC is veering away from its core mission of investor protection to stifle innovation in the fintech and cryptocurrency sectors.

Rose is championing the FIT for the 21st Century Act, which aims to rein in regulatory overreach and ensure that agencies like the SEC focus on their fundamental duties.

"It seems like they're abusing the Wells process as a scare tactic now."

Jake Chervinsky, Variant's Chief Legal Officer, echoed Rose's concerns, critiquing the SEC's aggressive stance on crypto. Chervinsky argues that the SEC's disproportionate attacks on crypto go against the commission's primary objectives, such as regulating equity and debt markets.

Gensler's SEC has taken legal actions against several high-profile crypto entities, including Coinbase, Kraken, and Binance. Politicians, crypto community leaders, and others have criticized Gensler's aggressive regulatory approach, saying he's measures do nothing but stifle innovation while misusing taxpayer money.

A Focus on Crypto

Ripple is one of the crypto companies that can celebrate a partial victory against the SEC, marking a significant moment in the ongoing tension between the cryptocurrency industry and regulatory bodies.