US congressmen threatened to sue the SEC chairman

Garry Gensler-min
Garry Gensler-min

The head of the US Securities and Exchange Commission (SEC) Gary Gensler spoke before the House of Representatives, facing harsh criticism from members of Congress. The Block reports this.

Politicians asked the official about the SEC’s policy regarding digital assets and clarified the timing of approval of the Bitcoin ETF.

Financial Services Committee Chairman Patrick McHenry began by asking whether Bitcoin is a security. The head of the Commission responded that the first cryptocurrency is not considered as such because it does not meet the Howey test.

Gensler previously stated that all digital assets, with the exception of Bitcoin, can be classified as securities.

McHenry also threatened the official with a subpoena for his “lack of transparency” with other departments and alleged ties to the collapsed FTX and its ex-CEO Sam Bankman-Fried.

“Either we find a path forward in which the SEC recognizes Congress as a co-equal branch of government and begins to respond to our comments, or my only option is to file a lawsuit,” the House member said.

Republican Tom Emmer criticized Gary Gensler for his “mocking” approach to regulating the cryptocurrency industry. In his opinion, the department prefers to consolidate power in its own hands instead of thinking about ordinary Americans and the future of the country.

The SEC Chairman again reiterated his position that most digital assets and crypto firms are subject to federal securities laws. He also added that the industry is generally non-compliant and riddled with conflict.

Congressman Ritchie Torres asked Gensler whether purchasing Pokemon trading cards could constitute a secured transaction and therefore be subject to securities laws. The opponent answered negatively.

Torres then asked how a similar transaction made through the blockchain would be classified. The head of the Commission thought about it and asked for more input.

Members of Congress were also unhappy with the delay of the spot Bitcoin ETF. Ahead of the hearing, the SEC postponed its decision on exchange-traded funds based on the first cryptocurrency and Ethereum.

Recall that in August, member of the House of Representatives Warren Davidson called for Gensler to be removed from his post as head of the department due to unsuccessful proceedings against Grayscale. It was preceded by the partial defeat of the regulator in the process against Ripple.

Later, the media accused the SEC chairman of turning the agency into a “banana republic.”

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