Gary Gensler, the Chair of the SEC, appeared in front of the House Financial Services Committee for the second time this month. The panel questioned him about how the SEC classifies crypto assets and what its broad agenda is for the industry. The session lasted 5 hours, with the House nearly overpowering him with tough questions.
It basically entered a point where Gary was clearly being criticized during the hearing. Rep. Tom Emmer said that it was evident that they were trying to consolidate their own power at the expense of opportunities for normal Americans. Adding that they were potentially putting the future of finance at risk as well. Calling the residents everyday Americans, Rep. Tom expressed concern about the financial future of the US and its citizens.
Tom made it clearer by saying that federal courts have told them that it is not their legal authority to accomplish a goal by squashing competition in the financial market.
Gary Gensler has maintained his stance on crypto assets. He has said that crypt companies will not register for compliance, even though they are perfectly capable of doing so. This stance has been tangible since the SEC vs. Crypto community gained momentum. He then stated that there is nothing that the customers have done to make them less deserving of protection through security laws.
He took a dig at the securities laws by highlighting that Congress could have restricted the definition in 1933 or 1934 to just bonds and stocks; however, they went on to include more than 30 items with a slight emphasis on investment contracts.
The House picked up on this smell and asked him if investment contracts require an actual contract. This question was asked by Rep. Richie Torres, who did not get the correct answer. It should have been either a yes or a no, but Gensler responded by saying that the definition was vague. Torres then asked him if the Pokemon card was security. To this end, he said that he would have to know more.
Meaning, he did not ignore the question or clarify with a specific answer. Instead, Gary sought more details about it. Gary Gensler was previously seen avoiding questions about the SEC vs. Ripple lawsuit. He said he would not mind talking about what the SEC has done; he just cannot speak about a lawsuit still being examined.
The hearing – Oversight of the SEC – was live-streamed at 10 a.m. EST. Experts had predicted that the panel would grill him. It is difficult to conclude if the panel grilled him. What can be said is that he was definitely asked about the definitions of crypto assets and their objectives as a commission.
This is an ongoing case, with more details to be made public. There could be another hearing to gain more clarity on crypto assets, the industry as a whole, and the stand of the SEC.