Gensler’s Crypto Crackdown Under Scrutiny in Congress

The agency headed by Gensler has been actively pursuing the cryptocurrency business, as demonstrated by the Hearing Memorandum.

Gary Gensler, the US Securities and Exchange Commission (SEC) chairman, will appear twice this week before Congress.

Gensler was supposed to speak with the Senate Banking Committee on September 25, but that second hearing has been rescheduled. Gensler will instead go before the House Financial Services Committee on September 24. “Capitol Hill staffers tell me they don’t yet know the reason for the change,” stated Eleanor Terrett of Fox Business.

The SEC and the cryptocurrency industry are still at odds, as evidenced by these hearings. According to data from Paradigm, the SEC has taken 171 enforcement proceedings against the cryptocurrency industry, a significant increase since Gary Gensler’s statement in April 2021.

The policy manager of Paradigm, Brendan Malone, observed:

“Since Chair Gensler took office on April 17, 2021, the SEC has increasingly gone to court to establish its policy positions—confirming what the industry has long known regarding regulation by enforcement.”

Joint testimony makes no mention of cryptocurrency.

On September 23, Gensler made known that he and the other four commissioners—Hester Peirce, James Lizarraga, Mark Uyeda, and Caroline A. Crenshaw—were going to be testifying before the House Financial Services Committee on the subject of “Oversight of the Securities and Exchange Commission.”

The SEC’s responsibility to protect the US capital markets of $100 trillion and uphold US dollar dominance was underlined in the joint testimony. It also emphasized the SEC’s $2.15 billion budget and mentioned that 784 actions were taken by its enforcement division in FY 2023, which led to $4.9 billion in fines and disgorgement.

When it came to enforcement, the commissioners wrote:

“[The] monetary remedies [are] designed to remove wrongdoer’s ill-gotten gains and deter future violations. the Commission’s enforcement actions protect investors by obtaining remedial injunctions in district court and, similarly, remedial suspensions and bars in administrative proceedings.”

Despite the commissioners’ lack of direct mention of the cryptocurrency industry, a transcript of the hearing that CryptoSlate examined suggested that the subject would be covered throughout the meeting.

The document clarified that the SEC pursued an aggressive enforcement strategy while prioritizing the digital asset market and continuing to press for more extraordinary jurisdiction over the ecosystem under Gensler’s direction.

The document pointed out that the SEC has yet to classify digital assets as securities explicitly. The future of the digital asset market in the US is at risk because of the regulatory uncertainty caused by this lack of clarity.