Gensler has been scrutinized for his crusade against crypto
Gary Gensler, the current SEC chairman, has been under scrutiny by the crypto community after the agency filed a lawsuit against Bittrex, claiming that several tokens, including Algorand, are securities. Crypto Twitter users have pointed out Gensler’s previous comments on Algorand, where he called it “great technology” and “brilliant work,” and accused him of “shilling” the token. The comments were made in a 2019 talk that Gensler gave at the MIT Sloan Idea Exchange when he was a professor at the school.
video here pic.twitter.com/FmXodHYqUt— foobar (@0xfoobar) April 17, 2023
In the video clip, Gensler referenced Silvio Micali, the founder of Algorand, and called the token’s consensus mechanism “interesting.” While it is possible that Gensler was paid to promote Algorand, his comments could also be seen as a gesture of kindness or appreciation towards a colleague. The SEC has not responded to requests for comment on the matter.
Gary Gensler has been promoting Algorand for years— LilMoonLambo (@LilMoonLambo) April 17, 2023
Now that the SEC ruled Algorand a security, is he going to get hit with the same $1.26 million dollar fine he gave Kim Kardashian?pic.twitter.com/ucuOOVxqPS
It’s important to note that the SEC can’t rule on whether a token is a security or not, they can only claim that it is. The rest is for a court to decide. Additionally, the $1.26 million fine that Kim Kardashian paid in relation to her promotion of a cryptocurrency called EthereumMax was done so without her admitting or denying the SEC’s findings, making the claim that EthereumMax is a security moot, at least in the context of the SEC’s complaint against Kardashian.
Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security.— Gary Gensler (@GaryGensler) October 3, 2022
This case is a reminder that, when celebrities / influencers endorse investment opps, including crypto asset securities, it doesn’t mean those investment products are right for all investors.
At a recent House oversight hearing, SEC Chairman Gary Gensler was criticized by Republicans for his crackdown on cryptocurrency, which they claim has failed to bring stability to digital asset markets. Gensler has significantly dialed up SEC enforcement since last year’s collapse of the FTX exchange, and cryptocurrency lobbyists have been pushing lawmakers to take a more aggressive tack with him.
Republican Patrick McHenry Stated that Gensler is causing innovation to leave the United States and endanger American Competiveness.
During the hearing, Republicans like Financial Services Chair Patrick McHenry criticized Gensler’s approach to regulation, saying that he was too focused on enforcement and not enough on providing clarity for the industry. They also attacked Gensler for stonewalling their efforts to investigate his response to the FTX failure. In contrast, Democrats defended Gensler’s crypto strategy and most of the SEC’s agenda.
Gensler was quick to defend the SEC’s work, but the frustration was palpable, with several lawmakers, including Rep. Alex Mooney, Rep. Andy Barr, and Rep. Ann Wagner, criticizing various SEC proposals. Democrats like Rep. Ritchie Torres also had questions, wondering aloud whether the SEC’s plans to update stock trading rules are “fixing what ain’t broken.”
Republicans have been critical of Gensler’s approach to cryptocurrency regulation, claiming that his crackdown on cryptocurrency has failed to bring stability to digital asset markets and is driving innovation overseas. They argue that he is too focused on enforcement and not enough on providing clarity for the industry. Democrats, on the other hand, have defended Gensler’s approach, with ranking member Maxine Waters stating that his crypto strategy marks a “stark difference” from that of previous SEC officials.
During the hearing, Maxine Waters, the ranking member of the Democrats, defended Gensler’s approach to cryptocurrency, stating that it was different from that of previous SEC officials. Representative Jim Himes of Connecticut criticized Republicans for criticizing the SEC for doing too much too quickly, after previously criticizing bank regulators for not doing enough.
The hearing provided an opportunity for Republicans to directly question Gensler, which several lawmakers took advantage of. While some criticized Gensler’s refusal to answer yes or no questions about his agenda, others criticized his proposals for requiring public companies to disclose climate risks, forcing private equity firms to make new disclosures to investors, and overhauling U.S. stock trading, which they believed would harm investors and make the equity markets less efficient. Even some Democrats had concerns, with Representative Ritchie Torres of New York questioning whether the SEC’s plans to update stock trading rules were addressing a problem that did not exist.