During a House Financial Services Committee hearing recently, U.S. Representative Tom Emmer fiercely attacked Securities and Exchange Commission (SEC) Chair Gary Gensler. Emmer particularly cited Gensler’s attitude to controlling cryptocurrencies to accuse him as being the most “destructive” and “lawless” SEC chairman in the agency’s almost 90-year existence.
Emmer highlighted Gensler’s creation of the term “crypto asset security,” claiming it was a fiction with no legal foundation. He maintained that Gensler’s “enforcement crusade” against the crypto industry over the past three years has revolved mostly around this word. Notably, SEC attorneys withdrew this word in a court footnote just last week, thereby complicating the regulatory scene.
The spokesman underlined that Gensler’s contradictory rhetoric has hampered development of the American crypto market. Over the way the Debt Box matter was handled by the SEC, where the agency had claimed a $50 million fraud scheme against the cryptocurrency business, he also assigned Gensler tasks. The case turned up negatively for the SEC, which resulted in agency dismissal and an order requiring payment of $1.8 million in attorney expenses.
Emmer said in his comments that the SEC’s lawyers had created false material in search of the case in line with Gensler’s supposedly “anti-crypto” goal. Gensler said that the Debt Box problem was not handled by the SEC satisfactorially.
Criticizing the agency for renouncing the phrase “crypto asset security” in court, SEC Commissioner Hester Peirce heightened the scrutiny by claiming that this recognition should have come far sooner. Peirce contended that the SEC has not fulfilled its responsibility as a regulator to offer clarity, suggesting a need for improved rules on how crypto tokens fit under current securities regulations.
Regarding the continuation of Staff Accounting Bulletin No. 121, which requires firms possessing crypto assets to acknowledge them as liabilities, Gensler adamantly said that this rule will stay in effect. Citing previous bankruptcies in the crypto business, he argued that public corporations should understand the dangers connected with owning cryptocurrency.
Critics such as Representative Wiley Nickel contended, however, that the law makes the atmosphere less safe for digital assets as it discourages American institutions from properly handling crypto-related items. Particularly considering the SEC’s exemption of the Bank of New York Mellon from the same reporting criteria, Nickel voiced worries about discrepancies resulting from the regulatory environment.
Gensler stated that notwithstanding growing dissatisfaction among legislators about the clarity and fairness of the agency’s laws on cryptocurrencies, the SEC follows consistent policies all around.
