This week, US Securities and Exchange Commission (SEC) Chairman Gary Gensler will appear before Congress twice. He was scheduled to testify before the House Financial Services Committee on September 24 and the Senate Banking Committee on September 25, although the second hearing has been postponed for unknown reasons. These hearings come at a time of tension between the SEC and the crypto industry, with 171 enforcement actions taken against the space since Gensler took office in April 2021.
Paradigm’s Policy Manager, Brendan Malone, noted that since Gensler became chairman, the SEC has been increasingly using court actions to establish its policy positions, showing a trend of regulation through enforcement actions. Despite the ongoing tensions with the crypto industry, Gensler and four other SEC commissioners recently testified before the House Financial Services Committee on the oversight of the SEC. The testimony emphasized the SEC’s role in safeguarding the US capital markets and maintaining dominance over the US dollar. They highlighted the SEC’s $2.15 billion budget and enforcement actions taken in FY 2023.
While the joint testimony did not directly address the crypto industry, a memo reviewed by CryptoSlate suggested that crypto would be discussed during the hearing. Under Gensler’s leadership, the SEC has prioritized the digital asset space and pursued broader authority over the ecosystem while maintaining an aggressive enforcement agenda. However, the SEC has not clearly defined digital assets as securities, leaving the industry in regulatory uncertainty and threatening its future in the US. The lack of clarity surrounding the classification of digital assets has been a point of contention in the industry.
The postponement of Gensler’s second congressional hearing has raised questions among Capitol Hill staffers, who are unsure of the reasons for the change. The SEC’s increased enforcement actions against the crypto industry since Gensler’s confirmation indicate a stronger stance on regulatory oversight under his leadership. The SEC has been active in taking actions against violations in the crypto space, aiming to protect investors and deter future wrongdoing. The ongoing tensions between the SEC and the crypto industry highlight the need for clear regulations and guidelines in the digital asset space to ensure its continued growth and development in the US market. As Gensler continues to testify before Congress, the industry will be watching closely to see how the SEC’s stance on digital assets evolves.
