• The recent US House of Representatives Financial Services Committee hearing with Gary Gensler, chair of the Securities Exchange Commission (SEC), promised to be unpleasant as the federal agency’s actions during Gensler’s leadership since spring 2021 came under scrutiny.
• Representative Warren Davidson had announced a measure to fire the SEC boss and cut the power of his successors before the hearing.
• However, despite fiery opening statements by committee chairman Patrick McHenry and hyperbole from Congress, it’s unclear if this hearing will result in any policy changes or softer stance on crypto regulation from the SEC.
Gensler Hearing Overview
The United States House of Representatives Financial Services Committee recently held a hearing with Gary Gensler, chair of the Securities Exchange Commission (SEC). During this hearing, Gensler was criticized for his agency’s regulatory approach through enforcement and its lack of clarity regarding legal classification for cryptocurrencies. Beforehand, Representative Warren Davidson had announced a measure to fire the SEC boss and cut the power of his successors in order to correct what he saw as a long series of abuses against the crypto industry.
Committee Chair Criticisms
The committee chairman Patrick McHenry criticized Gensler for both his record-breaking 50 enforcement actions against digital asset firms as well as his request for an additional $78 million funds to expand SEC activity. He characterized this approach as nonsensical punishment towards companies that did not know which laws applied to them; additionally he considered it overly aggressive rulemaking that was neither sufficient nor sustainable.
In response, Genslers defended himself saying that all standard procedures were followed with regards to comment periods for regulations related to digital assets such as cryptocurrency exchange-traded funds (ETFs). He stressed that there was room for improvement in terms of clarity around rules and guidance so that market participants can engage confidently without fear that they might inadvertently run afoul of securities laws or other applicable regulations.
Despite congressional saber-rattling and threats from members like Representative Davidson, it is unclear whether this hearing will have any effect on future crypto regulations or if it will soften the stance taken by Gensler or other members at the SEC. In particular, Gersner was reluctant to go into details at this hearing, leaving many questions unanswered and leaving uncertainty around current crypto regulation policy in place.
Overall, while there were some criticisms thrown at Gary Genser during this US House Financial Services Committee Hearing ,it remains unclear whether or not any policies will change or if there will be any shift in attitude towards regulating cryptocurrencies from the SEC moving forward .