How SEC Chair Gary Gensler Is Gatekeeping And Gaslighting The Crypto Industry
The crypto industry was hoping to get firm answers out of Gary Gensler, Chair of the Securities and Exchange Commission, but yet again, we got none. It's time to demand that Congress step in — and we'll help you do it.
By: Zack Abrams
April 21, 2023
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The crypto industry was hoping to get firm answers out of Gary Gensler, Chair of the Securities and Exchange Commission, when he was dragged before the House Financial Services Committee on Tuesday for a hearing on his management of the agency. They were left disappointed once again.
Chair Gensler — generally considered America's top financial cop — has presided over dozens of lawsuits against crypto operators during his tenure, scoring hundreds of millions of dollars in fines and penalties.
Despite that, Gensler once again failed to answer a simple question on Wednesday: Is Ether a commodity or a security? Even after being cornered by Rep. Patrick McHenry, the Chair of the aforementioned House committee, Gensler ducked the question a second time, drawing swift condemnation from House Republicans and founders across the crypto industry.
Solana co-founder Anatoly Yakovenko told Coinage in an exclusive interview he gives the SEC a 1-out-of-10 rating when it comes to regulatory clarity. And this week, Coinbase CEO Brian Armstrong even threatened to relocate his company offshore should the confusion continue.
And that makes total sense. In the SEC's enforcement action against crypto exchange Bittrex, the agency produced a "non-exhaustive list" of six tokens that it considers securities, thereby making Bittrex an unlicensed securities exchange. Included in that list is ALGO, the native token of the network Algorand, which also trades on Coinbase.
So is Coinbase destined to be met with the same fate as Bittrex? The industry is watching with bated breath to see what Gensler will do next. (Crypto fans also widely shared clips of Gensler praising Algorand as "great technology" in 2019)
To hear Gensler's side of the story, he's been exceedingly clear when it comes to domestic crypto regulation, and it's the industry's fault for choosing to be non-compliant. But House Republicans, echoing the feelings of many in the crypto industry, stated in a letter ahead of the hearing that the SEC's current regulations are "neither compatible with the underlying technology nor applicable" to crypto businesses.
Perhaps worse than anything up until this point, however, was what Chair Gensler chose to do with a free 30 seconds allowed to him during his testimony. After taking a second to look at his notes, he insinuated — unprompted — that the collapse of Signature Bank was directly related to its crypto dealings. But in a separate House hearing the following day, New York's Department of Financial Services Superintendent Adrienne Harris explicitly refuted that claim, stating clearly, "It is not the case that the failure of Signature Bank was related to crypto."
CAUGHT RED HANDED: SEC Chair Gary Gensler blamed crypto for Signature Bank's failure during his congressional testimony.— Coinage (@coinage_media) April 19, 2023
Today, NY Department of Financial Services Superintendent Adrienne Harris refuted that in front of the same committee:
"It is not the case that the failure… pic.twitter.com/1dwhRx5ZlD
Gensler's obstinate views seem unlikely to change. But Congress has the power to write laws governing the digital assets sector, and thus, potentially the power to prevent America's crypto industry from fleeing offshore.
So here's our call to action: contact your representative! Shitposting is fun, but, in our view, it's time for the crypto community to come together to have our voices heard in a serious way.
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