Gary Gensler Called Upon By US Senator To Explain SEC’s Failure In Crypto Regulations

SEC’s Chairman Called Upon to Give Explanation on Crypto Regulation

Since FTX’s collapse, everybody in the US has become concerned about the crypto industry. There is fierce debate on the subject in which US lawmakers are proactively advocating for laying down crypto regulations immediately.

In this context, the Securities & Exchange Commission, under the auspices of Gary Gensler as its Chairman, has been criticized a lot. The criticism is coming in from all quarters but mainly the pressure on SEC is that of the US Senate.

Tom Emmer, who also is a Senator, called upon SEC’s Chairman to explain why SEC hasn’t been able to provide crypto regulations.

Emmer wants Gensler to testify in person on behalf of the SEC before Congress and explain the reasons behind SEC’s failure in crypto regulation.

SEC Failed In Informing Congress of FTX

The Senator posted a tweet message last Friday where he stated that Gensler has managed to skip the attention of Congress. He further alleged that SEC even failed in keeping Congress informed about what was going on in FTX.

He claimed that Congress became aware of the FTX crisis through the media although it was SEC’s duty to keep Congress well-informed.

Emmer further took notice that since 5th October 2021, Gensler did not appear in person before the Financial Services Committee of the Senate.

According to Emmer, his team apprised him that SEC’s efforts in laying down crypto regulations were inappropriate and haphazard.

He emphasized that SEC’s efforts lacked focus and the will to regulate an industry where investors are at stake. He also noted that SEC failed in collecting information from targeted crypto firms where crises were glaringly evident.

Emmer remarked further that the mechanism adopted by the SEC for fetching information from targeted crypto companies was inappropriate and ineffective.

Information to Congress Could Have Minimized the Damage

Emmer revealed having written a letter to Gensler asking for information as to how SEC plans to move forward in crypto regulation. He noted however that SEC, under Gensler, refused to supply the required information to Congress.

Senator claimed that had Congress been informed of inconsistencies and irregularities in FTX, perhaps the damage could have been minimized.

At the end of his tweet post, Emmer then called upon Gensler to present his case before Congress. Emmer stated that there are several unanswered questions that require explanation on the part of the SEC and its Chairman.

Even in the past Emmer had many times criticized SEC’s Chairman and his enforcement approach. At one point in time, Emmer called Gensler a ‘power-hungry individual’.

Gary Gensler’s Induction into SEC

When Gensler took over the charge of SEC’s Chairman, the whole crypto community was pleased with his appointment.

He was believed to be more well-conversant with digital currencies and their underlying technology, Blockchain. Most importantly, he was known to be one of those intellects who favored the existence of digital currencies.

Hence, the crypto community was unanimously overwhelmed that Gensler would not pass any non-friendly crypto policies.

He was assigned the task of laying down crypto regulations a year ago but he hasn’t been able to provide any.

Perhaps this is the reason why he has been called upon by the Senator to give an explanation for his failure to give the regulations. The Senator may have impliedly accused him of favoring the crypto industry.

Although the US Senate is questioning the credibility of the US SEC, it is a fact that the regulator has been busy going after several crypto entities.

However, the amount of pressure the US Senate over the regulator shows that it had been going after unnecessary crypto firms.

Instead of running thorough investigations on entities such as FTX, it has been running long battles against Ripple.