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.
“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.
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.
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.
“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.
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.