Two Republican leaders in the U.S. House of Representatives, Reps. Patrick McHenry (R-NC) and Tom Emmer (R-MN), are asking the Securities and Exchange Commission (SEC) to provide clarity on the regulatory classification of digital asset airdrops.
Digital asset airdrops refer to distributions of a digital asset to early users of a blockchain protocol. They are intended to incentivize participation on blockchain-based applications. As such, airdrops play a key role in the development of a decentralized blockchain ecosystem.
In a letter to SEC Chair Gary Gensler, McHenry, chair of the House Financial Services Committee, and Emmer, the House Majority Whip, expressed their concern that a misapplication of the securities laws will prevent this technology from achieving decentralization and its full potential.
“As you know, the ethos of crypto and blockchain technology is premised in decentralization. Yet, the SEC’s regulatory approach seems to make the goal of decentralization impossible to obtain. By creating a hostile regulatory environment, including making assertions about airdrops in various cases and increasing warnings for additional enforcement actions, the SEC is putting its thumb on the scale and precluding American citizens from shaping the next iteration of the internet,” McHenry and Emmer wrote to Gensler.
The Republican lawmakers asked Gensler to answer a series of questions related to digital asset airdrops.
One of the questions asked if the SEC has quantified the market impact in the event that the SEC classifies any amount of digital assets as securities.
McHenry and Emmer are seeking responses from Gensler by Sept. 30.