Gary Gensler, who has been blamed for “kneecaping” US capital markets and criticized for dodging questions about Bitcoin and Pokemon cards, appears to have come under fire from Congress this week.
On September 27, the head of the US Securities and Exchange Commission once again found himself before lawmakers at a scheduled hearing to discuss his agency’s oversight of the markets.
Here are some highlights and highlights from the hearing.
“You’re the Tonya Harding of the Securities Exchange.”
One of the most vivid analogies came from US Representative Andy Barr, who accused Gensler of “subjugating” US capital markets with regulatory red tape.
Barr pointed to old testimony from Gensler, in which Gensler said the United States is the largest, most sophisticated and innovative capital market in the world and that it should not be taken for granted because “even gold medalists have to keep training.”
“With all due respect, Mr. President, if America’s capital markets are a gold medalist, you are the Tonya Harding of securities regulation,” Barr said.
“You’re crippling America’s capital markets with a torrent of red tape coming out of your commission.”
Barr is supposedly referring to a scandal in which American figure skater Tonya Harding hired an attacker to attack her rival, Nancy Kerrigan, in the lead-up to the 1994 US Figure Skating Championships and the Winter Olympics. Kerrigan ended up not competing in the US Championships.
Mr. Barr to Gensler:
“If America’s capital markets are a gold medalist, then you’re like the Tonya Harding of securities regulation because you’re disrupting America’s capital markets…”
– John Dickens (@johnLdickens) September 27, 2023
“I hope the Biden administration says you’re fired.”
Meanwhile, US Rep. Warren Davidson also attacked Gensler, saying he hopes the Biden administration will fire him.
“I hope the Biden administration says you’re fired,” Davidson said.
Davidson accused Gensler of pushing a “woke” political and social agenda and abusing his role as chairman of the Securities and Exchange Commission.
Gary Gensler’s tenure at the SEC highlights two major problems.
– Warren Davidson (@WarrenDavidson) September 27, 2023
The US representative added that he hopes the stabilization bill introduced by the SEC with US Representative Tom Emmer will achieve this.
“You defend this bill [SEC Stabilization Act] “You act like a president every day,” he concluded.
Gensler was not given the opportunity to respond.
Gensler reiterates that Bitcoin is not a security
When Patrick McHenry, Chairman of the US House of Representatives Financial Services Committee, asked whether Bitcoin was a security, Gensler eventually relented, noting that Bitcoin did not meet the Howey test.
“It doesn’t meet the Howey test which is the law of the land,” Gensler said, implying that Bitcoin is not a security.
McHenry then suggested that Bitcoin should be a commodity, which Gensler avoided answering, saying that testing that would fall outside the scope of US securities laws.
Gary Gensler says so #Bitcoin It is not a security, but he refuses to say that it is a commodity.
We’re running out of time. When a powerful company like BlackRock asks for a Bitcoin ETF, you have to offer it. pic.twitter.com/yhKcMzfzx6
— ₿itcoin Therapist (@TheBTCTherapist) September 27, 2023
Henry also suggested that Gensler tried to “stifle the digital asset ecosystem” and refused to be transparent with Congress about the SEC’s communications with FTX and its former CEO Sam Bankman-Fried.
Gensler was also not given the opportunity to respond to McHenry’s allegations.
Are Pokemon trading cards securities? It depends.
U.S. Rep. Ritchie Torres took the time to question Gensler about his interpretation of what constitutes an investment contract.
Torres put Gensler to the test by asking whether purchasing an actual Pokémon trading card constitutes a securities transaction.
I questioned @SECGov Chairman Gary Gensler has spoken about the term “investment contract,” which is key to defining his authority over cryptocurrencies.
Gensler struggled to answer basic questions such as whether an investment contract required a contract. His evasion is deafening and damning. pic.twitter.com/EJcZEHiKGL
– Rep. Ritchie Torres (@RepRitchie) September 27, 2023
“Suppose I were to buy a Pokemon card. Would doing so constitute a security transaction?”
“I don’t know what the context is,” Gensler replied — before eventually concluding that it’s not a guarantee if purchased in a store. Then Torres asked:
“If I were to buy a Pokemon card token on a digital exchange via the blockchain, is that a security transaction?”
“I should know more,” Gensler replied.
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Gensler then explained that when the investing public can expect profits based on the efforts of others, that is the essence of the Howey Test. Rep. Torres called Gensler’s “evasions” “deafening and damning.”
A sign of challenge
Meanwhile, among the interrogations between Gensler and US representatives, eagle-eyed observers noticed the Coinbase “Stand With Crypto” logo behind the SEC chief.
BREAKING: Coinbase stand with Crypto logo on display at Gary Gensler hearing pic.twitter.com/IAwqyDEQea
– Miss Teen Crypto (@missteencrypto) September 27, 2023
The Coinbase-led initiative is a 14-month campaign that launched in August. It aims to lobby for cryptocurrency legislation in the United States
Coinbase also organized a “Stand Up for Cryptocurrency Day” held in Washington, D.C. on September 27 to call for better innovation and policy in the cryptocurrency space.
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