Gary Gensler continues to face criticism from various entities and organizations.
Gary Gensler, the chair of the US Securities and Exchange Commission (SEC), finds himself in a hot spot as US House committee chairs and the Blockchain Association demand enhanced transparency and regulatory prudence.
Jim Jordan, James Comer, and Patrick McHenry, the respective chairs of the Judiciary, Oversight, and Financial Services Committees, recently expressed their dissatisfaction over responses they received from Gensler regarding their previous correspondence.
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The original letter dating back to November 1st was centered on regulatory compliance, specifically with recordkeeping requirements.
Their original letter outlined specific requests, including a confirmation of the SEC's adherence to federal recordkeeping and transparency regulations. There was also a demand for a guarantee that neither Gensler nor his colleagues had used private email accounts for official matters. The congressional leaders were also keen to understand the agency's usage and definition of "off-channel communications."
It is worth noting that these requests came as a response to the Wall Street Journal report that raised questions about the SEC's recordkeeping methods. The report declared:
Government officials routinely engage in the same sort of record-keeping shenanigans for which Wall Street groups were recently fined <by the SEC>.
This concern, centered around the use of chat functions by officials for official business, goes unsearched during Freedom of Information Act requests.
The house leaders have again put forth their original requests in a new letter to Gensler, reading:
If you do not intend to comply with any or all of the above requests #1-5, describe the factual and legal basis for your noncompliance.
Soon after, the Blockchain Association released a paper, fueling further criticism of Gensler. The organization urged Gensler to withdraw from decisions related to digital asset enforcement. The paper stated:
In the digital asset space, the SEC has all but abandoned its role as a rulemaking body. Key issues of existential importance to the digital asset industry remain unresolved, chief among them the question of whether and when a digital asset represents a "security."
The paper quoted Gensler’s statement that all digital assets, except Bitcoin, are unregistered securities, and the trading platforms facilitating their trade are unregistered securities exchanges. The Association contends that such statements prove that Gensler has prejudged "everything other than Bitcoin." It concluded by pointing out that:
Due process requires not only that agency decisionmakers act without bias, but also that they avoid even the appearance of bias.
The pressure on Gensler is undeniably increasing. With demands for better transparency and accountability, the regulatory framework of the US digital asset space might be in for an overhaul. Only time will tell how these events will shape the future of cryptocurrency regulation in the US.
Gansler has been facing criticism for quite some time. On June 12th, the House of Representatives Representative Warren Davidson proposed the "SEC Stabilization Act," which offers to restructure the US SEC and fire current Chair Gary Gensler.
