Three influential committee chairs in the United States House of Representatives have sent a scathing letter to SEC Chair Gary Gensler in a continued effort to hold the U.S. Securities and Exchange Commission (SEC) accountable. The chairs, Judiciary Committee Chair Jim Jordan, Oversight Committee Chair James Comer, and Financial Services Committee Chair Patrick McHenry, expressed their dissatisfaction with Gensler’s response to their initial inquiry on the SEC’s compliance with recordkeeping requirements and transparency rules.
The committee chairs’ letter, dated June 28, highlighted the lack of a satisfactory response from Gensler, noting that their original requests regarding federal recordkeeping regulations, the use of private email accounts, and “off-channel communications” remained unanswered. The congresspeople’s concerns were prompted by a recent Wall Street Journal report, which criticized government agencies, including the SEC, for inadequate recordkeeping practices.
The report shed light on the use of chats for official government business, which are currently not scrutinized in response to Freedom of Information Act requests. The committee chairs, joined by Rep. Tom Emmer, emphasized that such record-keeping discrepancies cannot be ignored, especially when Wall Street groups have faced fines for similar infractions.
Drawing attention to the inconsistencies in Gensler’s publicly accessible meeting schedules in 2021, the committee chairs expressed their deepening concerns over the lack of transparency within the SEC. The letter reiterated their original requests and demanded an explanation if Gensler chose not to comply with their inquiries.
Meanwhile, the Blockchain Association, an industry advocacy group, released a paper the following day, calling for Gensler’s recusal from digital asset enforcement decisions. The paper cited Gensler’s stated views on digital assets, claiming that he has prejudged all digital assets other than Bitcoin as unregistered securities. The Association argued that Gensler’s biased stance not only violates due process but also hampers the resolution of critical issues within the digital asset industry.
Wells notice recipients, who have received preliminary notice of potential SEC enforcement action, were urged by the Blockchain Association to seek Gensler’s recusal from their cases through the SEC or in federal court. The paper emphasized the importance of agency decision-makers acting without bias and avoiding even the appearance of bias.
The mounting pressure on Gensler and the SEC raises significant concerns for the crypto sector in the United States. The ongoing scrutiny regarding recordkeeping practices and Gensler’s perceived bias against digital assets other than Bitcoin has sparked debates about the SEC’s role as a rulemaking body. With key issues surrounding the classification of digital assets as securities left unresolved, the industry seeks clearer guidance and regulatory certainty to foster innovation and growth.
As stakeholders eagerly await Gensler’s response to the committee chairs’ latest letter and the industry’s demand for recusal, the outcome will undoubtedly shape the future of the U.S. crypto sector. The resolution of these matters has the potential to impact market participants, digital asset trading platforms, and the overall regulatory landscape, as the industry grapples with regulatory clarity and fair treatment under the law.