Regulators at the U.S. Securities and Exchange Commission aren't doing enough when it comes to crypto regulation, Rep. Warren Davidson (R-Ohio) told CoinDesk TV's "First Mover" on Tuesday.

"You've got people that are engaging in overt pump-and-dump scams and getting away with it because the SEC is asleep at the wheel," Davidson said. "Some seem to get a free pass, and others seem to get their business models killed."

Davidson, vice chairman of the Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion, said that even before the collapse of bankrupt crypto exchange FTX, "no one's been happy with the job the SEC has done."

He gave the example of the SEC's crackdown on celebrity influencer Kim Kardashian and her promotion of ethereummax (EMAX), a token built on top of the Ethereum blockchain. Even though Kardashian paid a $1.26 million fine for not disclosing that she was paid to promote the token on social media, ethereummax continues to trade, Davidson noted.

"The results are self-evident. They are not getting the job done," Davidson said.

Who regulates whatMeanwhile, the SEC and Commodity Futures Trading Commission have yet to decide which agency will regulate crypto spot markets.

To address that issue, Davidson said Congress needs to "craft a policy" that can make its way through the House and the Senate. That may begin with stablecoins, which are backed by a reserve asset such as the U.S. dollar or gold and to members of Congress are "concrete and tangible," he said.

He said lawmakers must figure out the role stablecoins have in the payment systems and with banks and what role the SEC would have.

"They've [the SEC] engaged in regulation by enforcement, and that's frustrated markets quite a lot," Davidson said.

During a separate segment on "First Mover," SEC Commissioner Hester M. Peirce also said that regulating through enforcement isn't the best option.

While she said that "it's important to bring enforcement actions when there's fraud," and such cases fall within the agency's jurisdiction, she also said that "there really is a better approach" to crypto regulation and that depends on what Congress decides and which government agency is granted that authority.