Many Heavily Criticize Gary Gensler Ahead Of Congressional Hearing
U.S. Congressman Tom Emmer has directly criticized SEC Chair Gary Gensler, calling him the most destructive and lawless chair in the history of the regulatory agency. As the upcoming Presidential Election looms, Kamala Harris insists on keeping Gensler where he is whereas Donald Trump has explicitly stated he plans to fire Gensler immediately if he wins.
A Shaky Foundation
Emmer accused Gensler of inventing the term crypto asset security without providing any regulatory clarity, which has fueled enforcement efforts by the SEC against the crypto industry for three years. Last week, the SEC retracted the term in a court footnote.
Emmer also challenged Gensler on the mishandling of the Debt Box case, where the SEC sued a crypto startup for an alleged $50 million fraud, resulting in a dismissal and a $1.8 million fee against the SEC. Gensler admitted the case was poorly handled. Mark Cuban outright called Gensler a blight and that his departure will greatly contribute to local GDP growth.
Fighting Back
SEC Commissioner Hester Peirce also criticized the agency for taking too long to retract the aforementioned term, suggesting that it should have acknowledged earlier that crypto tokens are not securities. She indicated that while congressional input on definitions would be helpful, the SEC could have provided guidance itself.
Despite calls by 42 lawmakers to revoke the SEC Staff Accounting Bulletin No. 121, which requires companies holding crypto to list it as a liability, Gensler confirmed it would stay in place, arguing it helps companies understand risks. Rep. Wiley Nickel countered that this rule could hinder banks and their ability to custody crypto products, creating greater risk by shifting control to non-bank entities.
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