The US Securities and Exchange Commission (SEC) Chair Gary Gensler continues to find himself in hot waters. Facing increasing scrutiny for overreaching his regulatory powers in recent months, Gensler has now been threatened—with disciplinary action by the US House Committee on Oversight and Accountability.
Gensler issued a stern warning for not revealing essential information
James Comer — Chairman of the Committee of Oversight and Accountability — has sent a callous letter to Gensler, accusing him of obstructing congressional oversight over non-disclosure of some documents. The documents in question pertain to the SEC’s involvement in the development of European social engineering schemes.
Designed by the European Union, these initiatives are “disguised” as disclosure and due diligence orders, according to Comer, who seems to be irked due to a months-long delay by the SEC to provide requested information. “As the SEC Chair, you have obstructed and continue to obstruct congressional oversight,” Comer has said in the letter addressed to Gensler.
“If you do not begin cooperating with the Committee’s oversight, the Committee has no choice but to consider the use of the compulsory process. I expect nothing less than full cooperation with our inquiry, which begins with the SEC providing documents actually responsive to our requests,” the letter reads.
Gensler’s witch-hunt against crypto companies
Following the collapse of crypto exchange FTX, Gensler has stepped up his offensive against the crypto industry. Under his reign, the SEC has sued some of the biggest names in the crypto business—including Binance, Coinbase, and Terraform Labs—for selling unregistered securities and misleading investors. The SEC has also been targeting stablecoin issuers and delayed multiple spot Bitcoin exchange-traded funds (ETFs.)
However, industry leaders and the community have condemned Gensler’s heavily stigmatized stance towards crypto. Many believe Gensler’s actions are smothering innovation and forcing crypto businesses out of the US. Last month, venture capital firm Paradigm voiced concerns about the SEC’s crackdown on the crypto industry, warning it “could fundamentally reshape our comprehension of securities law in several aspects.”
Paradigm’s comments were in reference to the SEC’s alleged mishandling of the Binance lawsuit. The company has accused Wall Street’s top cop of overreaching its jurisdiction and using its case against Binance to alter the law.
Additionally, Twitter boss Elon Musk has accused the SEC of abusing its regulatory powers.
Ripple Labs co-founder and CEO Chris Larsen has also criticized the SEC and the Biden administration. He opines that the US government’s “hostile” crypto policies are hurting Washington’s position as a global blockchain leader.
Proposed US crypto tax rules face criticism
Larsen’s sharp comments come against the backdrop of new rules regarding the crypto tax reporting for brokers. Moreover, the US government has announced its plan to levy a 30% tax on crypto mining activities, citing its environmental impact. However, the proposed cryptocurrency taxation rules have come under fire from Patrick McHenry, Chairman of the House Financial Services Committee.