In this post:
- Gary Gensler, the chair of the SEC, came under heavy fire during a congressional hearing.
- Hester Peirce, sometimes known as “Crypto Mom,” drew attention to the agency’s hazy regulation of digital assets.
- Gensler defended the Howey Test’s application by the SEC.
US Securities and Exchange Commission (SEC) Chair Gary Gensler and his fellow commissioners came under heavy fire on Tuesday at a highstakes congressional hearing about how they handled digital assets.
The important hearing revealed a growing dissatisfaction with the SEC’s supervision of cryptocurrency.Gensler was criticized by Committee Chair Patrick McHenry for purported regulatory overreach over digital assets.While directing the commission’s aggressive efforts on businesses like Coinbase, Uniswap, and OpenSea, he accused the agency of operating like a rogue agency.
Gensler’s SEC is chastised for going too far with crypto
The agency’s oversight of cryptocurrency has come under fire once more as detractors call for more open guidelines.Hearings featuring testimony from all five commissioners—Caroline Crenshaw, Jaime Lizárraga, Mark Uyeda, among others—showed the growing rift over the SEC’s approach to regulating digital assets.
SEC Commissioner Hester Peirce, dubbed “crypto mom,” expressed her displeasure with the agency’s ambiguity.In order to hide the lack of regulatory certainty, we’ve adopted a legally ambiguous stance, Peirce said, drawing attention to the ambiguity surrounding the definition of securities in the cryptocurrency sector.
“This is the premier agency to protect investors, and it has responsibility for virtually every other intangible investment asset,” Congressman Brad Sherman said at the session. He added, “We can provide clarity, although I don’t think it’s necessary, we could pass an additional statute to clarify that crypto is a security.”
🚨NEW: @HesterPeirce undermines @GaryGensler right off the bat, saying that the SEC has taken a legally imprecise view to mask the regulatory lack of clarity when it comes to #crypto:
— Eleanor Terrett (@EleanorTerrett) September 24, 2024
“I think we've fallen down on our duty as a regulator not to be precise, and so tucking into a…
Eleanor Terrett, a Fox Business journalist, reported that Hester Peirce undermined Gensler over the situation and suggested that the commission has taken a legally imprecise view to mask the regulatory lack of clarity when it comes to crypto.
“By not being precise, we’ve failed in our role as regulators,” the speaker stated. Peirce emphasized that the organization ought to have realized a long time ago that a token by itself is not a security.
Mommy Crypto takes a stab at it again
Crypto Mom went on to attack the SEC’s enforcement tactics, claiming that it is ineffective and raises questions about the limits of the agency’s jurisdiction.
Rep. French Hill interrupted Jaime Lizárraga when he deferred to Congress, pressing Lizárraga on the watchdog’s position on bipartisan crypto legislation.The lawmaker used the fraud concerns in the cryptocurrency sector to get Lizárraga to support the SEC’s actions.
Gary Gensler, in the meantime, restated the SEC’s stance on blockchain technology as being “merit neutral”.”We remain merit neutral and focus on the economics of the investment, regardless of whether it’s on a blockchain ledger or not,” he said.
The chair of the SEC once again used the Howey Test to support his agency’s strategy for policing digital assets.Rep. Ritchie Torres (DNY), however, vehemently disagreed with Gensler’s view, labeling it eccentric.
Torres went so far as to say that Gensler’s position might make it harder to distinguish between securities and collectibles by allowing “any piece of art, music, or consumer good” to be classified as a security.
