5 highlights in the SEC Chairman's testimony before Congress

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On September 27, the head of the US Securities and Exchange Commission (SEC), Gary Gensler, once again appeared in a scheduled hearing to discuss how his agency monitors the market. Here, the chairman was asked whether purchasing Pokemon trading cards is a securities transaction and whether Bitcoin is a commodity .

“Are you the Tonya Harding of securities regulation?”

This is the analogy of Congressman Andy Barr, who accused Gensler of "bullying" the US Capital market with bureaucratic regulations.

Barr referred to an old testimony by Gensler, in which Gensler argued that the US is the largest, most complex and most innovative Capital market in the world and should not be taken for granted because “even those who Even if you win a gold medal, you still have to continue training." Barr believes that the SEC chairman is paralyzing the Capital market with a series of complex regulations that limit competition and development.

Mr. Barr to Gensler:

“If the US capital markets are a gold medalist, you are the Tonya Harding of securities regulation because you are kneecapping the US capital markets…”


— John Dickens (@johnLdickens) September 27, 2023

“I wish the Biden administration would say, 'You're fired.'”

Meanwhile, Congressman Warren Davidson also criticized Gensler. Davidson reportedly accused Gensler of pushing a “woke” political and social agenda and abusing his Vai as SEC chairman.

🚨 Gary Gensler's tenure at the SEC highlights two key issues.

1) @GaryGensler problem
2) @SECGov structural problem

That's why I introduced the SEC Stabilization Act to #FireGaryGensler and restructure the SEC. pic.twitter.com/Ud3giejKfZ

— Warren Davidson🇺🇸 (@WarrenDavidson) September 27, 2023

The congressman said he hopes the SEC Stabilization Act he introduced with his colleague, Congressman Tom Emmer, can make that happen.

“You are making the case for this bill [the SEC Stabilization Act] every day as chairman,” he emphasized.

Gensler reiterates Bitcoin is not a security

When asked by House Financial Services Committee Chairman Patrick McHenry whether Bitcoin was a security, Gensler finally relented and said, “Bitcoin does not meet the Howey test,” implying Bitcoin does not. must be securities.

McHenry then suggested whether Bitcoin is a commodity? which Gensler avoided answering, saying that verifying it was beyond the scope of US securities laws.

Gary Gensler says that #Bitcoin is NOT a security, but he refuses to say that it's a commodity.

He's running out of time. When a powerhouse like BlackRock asks for a Bitcoin ETF you MUST deliver. pic.twitter.com/yhKcMzfzx6

— The ₿itcoin Therapist (@TheBTCTherapist) September 27, 2023

Henry also accused Gensler of trying to “suffocate the digital asset ecosystem” and refused to open up to Congress about the SEC's connection to FTX and its former CEO, Sam Bankman-Fried.

Gensler also did not have a chance to respond to McHenry's statements.

Are Pokemon trading cards securities? It depends.

Congressman, Ritchie Torres took his time to ask Gensler for his interpretation of what constitutes an investment contract.

Torres challenged Gensler with the question of whether purchasing physical Pokemon trading cards constitutes a securities transaction.

I cross-examined @SECGov Chair Gary Gensler about the term 'investment contract', which is key to determining his authority over crypto.

Gensler struggled to answer basic questions like whether an investment contract requires a contract. His evasions are deafening and damning. pic.twitter.com/EJcZEHiKGL

— Rep. Ritchie Torres (@RepRitchie) September 27, 2023

“Let's say I buy a Pokemon card. Does doing so constitute a securities transaction?”

Gensler replied – “I don't know what the context is” – before concluding that it is not a security if it is bought in a store. Torres then asked:

“If I buy encrypted Pokemon cards on a digital exchange via blockchain, is that a secure transaction?”

“I should know more,” Gensler replied.

The SEC chairman explained that this is when the investing public can predict returns based on the efforts of others – this is the essence of the Howey test. Torres called Gensler's “evasion” “shrill and damning.”

Sign of defiance

Meanwhile, amid the cross-examination between Gensler and the Congressmen, eagle-eyed observers noticed the Coinbase “Stand With Crypto” logo behind the SEC chair.

BREAKING: Coinbase Stand with Crypto logo displayed at Gary Gensler hearing pic.twitter.com/IAwqyDEQea

— Miss Teen Crypto (@missteencrypto) September 27, 2023

The Coinbase-led initiative is a 14-month campaign launched in August. It aims to promote cryptocurrency legislation in the US.

Coinbase also organized “Crypto Advocacy Day,” which took place in Washington, DC on September 27 to advocate for better cryptocurrency policy and innovation.

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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