House Democrats Accuse SEC of Partisan Behavior Over Crypto Bill

House Democrats have accused the U.S. Securities and Exchange Commission (SEC) of refusing to provide key information on a proposed cryptocurrency market structure bill. This bill is set to be a significant piece of legislation for the crypto industry, aiming to further limit instances where stablecoins could operate as securities issued by investment companies, among other provisions.

When legislation that could impact the SEC's operations is pending, the SEC typically provides what is known as "technical assistance (TA)" to lawmakers. This type of analysis, usually provided by nonpartisan SEC experts to both party lawmakers, is intended to help them understand the potential implications of the relevant bill on the agency and the financial markets. However, Democratic staffers on the House Financial Services Committee claim that the SEC has refused in recent weeks to provide them with written analysis of this new cryptocurrency bill — while allegedly providing this information to Republicans in private.

This refusal has led to accusations of partisan behavior from the SEC, with Democrats feeling shut out of the process. The lack of transparency could potentially hinder the effectiveness of the bill and its implementation, as Democrats may not have the necessary information to make informed decisions. The situation has escalated tensions between the SEC and House Democrats, with the latter expressing frustration over being left in the dark regarding technical details of the bill.

Democratic staffers have described the SEC's actions as "trying to hide the ball," indicating a lack of cooperation and transparency. This has raised questions about the SEC's impartiality and its role in the regulatory process. The upcoming hearings on the crypto market structure effort will be crucial in addressing these concerns and ensuring that all parties have access to the necessary information to make informed decisions.