Gary Gensler Hearing: US House Committee Threatens SEC; SEC Is Choking The Crypto Market  – Coinpedia Fintech News

Gary Gensler Hearing: US House Committee Threatens SEC; SEC Is Choking The Crypto Market  – Coinpedia Fintech News

September 27, 2023

Today, all eyes are on Gary Gensler, the Chairman of the Securities and Exchange Commission (SEC), who found himself in the hot seat. The US House Committee accused the SEC of stifling the crypto market and also threatened to subpoena over FTX documents.

Gary Gensler Faces Pressure From McHenry  

Rep. Patrick McHenry, the head of the U.S. House Financial Services Committee, has indicated a potential move to subpoena the Securities and Exchange Commission (SEC) for documents concerning ex-FTX CEO, Sam Bankman-Fried, also known as SBF.

McHenry started by saying, “Last time you were before this Committee, I voiced my concerns regarding your reckless approach to rulemaking, lack of a capital formation agenda, crusade against the digital asset ecosystem, and unresponsiveness to Congress.”

McHenry also warned Gensler that SEC’s failure to address those concerns over the last five months have made the committee impatient. He emphasized the need for a thorough economic analysis of proposed rules and criticized the Commission for not assessing their combined impact.

McHenry pointed out bipartisan concerns over the SEC’s regulatory agenda and its lack of public input. He highlighted issues raised by members from both parties, which the SEC hasn’t addressed. McHenry also criticized Gensler for not focusing on capital formation and accused him of harming the digital asset ecosystem.

He mentioned that while Congress seeks clear rules for digital assets, Gensler’s approach has been inconsistent and often unsuccessful in court. Lastly, McHenry voiced concerns over Gensler’s lack of transparency regarding his interactions with FTX and Sam Bankman-Fried.

McHenry said, “The SEC is not above the law nor is it unique. Other financial regulators have routinely complied with congressional oversight. So let me be clear, I do not want to be the first Chairman of the Financial Services Committee to issue a subpoena to the SEC.”

SEC Faces Government Shutdown Concerns

McHenry inquired about Gensler’s stance on Bitcoin, referencing a previous discussion on Ethereum. Gensler clarified that he doesn’t view Bitcoin as a security due to its non-compliance with the Howey test. Additionally, Gensler highlighted concerns about fraudulent activities in the crypto sector, emphasizing the potential risks to investors.

During the hearing, McHenry primarily discussed digital assets and oversight. In contrast, Maxine Waters, the ranking member, voiced worries about the impact of a possible U.S. government shutdown on the SEC. Gensler indicated that if a spending agreement isn’t reached by Sept. 30, about 92-93% of the SEC staff would face furloughs.

Currently, the hearing is favoring the crypto market and four U.S. lawmakers pressed Gary to greenlight spot Bitcoin ETFs without delay. In a letter released on Tuesday, the Congress members argued that there were no valid grounds preventing the SEC from approving its first spot Bitcoin ETF. 

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