Policymakers Attack SEC Chair Gary Gensler Over Non-compliance
During a hearing on September 27, policymakers criticized Gary Gensler, the chair of the Securities and Exchange Commission (SEC), for failing to comply with requests for documents related to bankrupt cryptocurrency exchange FTX and its founder Sam Bankman-Fried.
Doubts about Gensler’s Commitment to Addressing Concerns
Representative Patrick McHenry expressed doubts about Gensler’s commitment to addressing bipartisan legislative concerns and protecting investors. He mentioned that Congress’ patience with Gensler was wearing thin.
???? SEC chair @GaryGensler continues to blatantly ignore requests for documents from Congress in Strive of An extremist agenda that threatens the integrity of our financial markets, protection of Investors and our economic competitiveness. Our patience is wearing thin. – Patrick McHenry (@PatrickMcHenry) September 27, 2023
Bitcoin’s Legal Status and Cryptocurrency Misconduct
Gensler stated that Bitcoin is not compatible with the Howey test, which determines whether an asset is an investment contract. However, he did not definitively confirm Bitcoin’s commodity status. Many policymakers raised concerns about cryptocurrencies and the collapse of FTX, citing investor losses and misconduct by executives.
Accusations of Political Bias and Bureaucracy
Representative Tom Emmer implied that Gensler’s political agendas and affiliations with Wall Street stakeholders compromised the neutrality of the SEC. Representative Andy Barr accused Gensler of hindering financial markets with bureaucracy. Another lawmaker, Representative Warren Davidson, suggested that Congress should fire Gensler.
Review of Bitcoin ETFs and SEC’s Decision Deadlines
Gensler indicated that the SEC would continue reviewing Bitcoin exchange-traded fund (ETF) filings, including the Grayscale case. The SEC’s decision on ARK 21Shares ETF and other applications was delayed until January 2024. This delay may impact previous ETF decision deadlines.
SEC’s Authority and Government Shutdown
Gensler mentioned that the SEC can seek assistance from American courts regarding the ruling on the Bitcoin ETF rejection. He also noted that due to an imminent government shutdown, the SEC may operate with fewer employees, potentially affecting internal reviews and decision-making processes.
Additional Resources:
SEC’s Gensler Dodges Bitcoin ETF Question in Latest Senate Hearing
Grayscale Urges SEC to Approve Instant Deposit Bitcoin ETF
