On Thursday, U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler spoke before the Senate Banking Committee to defend the agency’s stance on cryptocurrencies and its efforts to include climate risks in public company reports.
Pennsylvania Senator Pat Toomey has criticized the SEC for its lack of a crypto regulatory framework. calling out Gensler for failing to recognize that cryptocurrencies are distinct from traditional investment products like bonds and stocks.
Almost all crypto offerings today, according to Gensler, meet the criteria for a traditional security and, as such, should be registered and regulated.
The head of the regulatory body argued his case to an SBC full of doubters, who questioned his claim that Bitcoin acts more like a commodity and most tokens are more like conventional equities.
Are SEC And Gensler Hostile Against Financial Industry?
Republican displeasure with Gensler’s agenda is a backdrop to the panel’s routine supervision of his work. He has been accused of going too far by the SBC members who say he has taken a hostile position toward the financial industry and launched a sweeping attack on the U.S. capital markets.
Republican leader on the SBC, Toomey, argued that the commission wasn’t performing its job properly because of the unique characteristics of digital currencies like Bitcoin.
SEC Chair Gary Gensler. Image: Business Insider.
Toomey explains that crypto tokens may be settled in real time without middlemen, have variable degrees of decentralization, and normally have no financial hold on the issuer.
The senator also implied the commission has not been as forthright as it should be in its endeavors to enforce securities regulations that may apply to cryptocurrencies. The biggest problem, according to Toomey, is that “the SEC isn’t sharing with us the structure they’re utilizing.”
Another Senator Dismayed By Gensler
Minnesota Republican Congressman Tom Emmer expressed displeasure with the SEC’s “unethical” treatment of cryptocurrency firms last July. He stated that Gensler “baits and threatens” companies.
The U.S. is actively working on a framework for crypto rules. One contentious issue is deciding between the agency and the Commodity Futures Trading Commission as the appropriate regulator.
As anticipated by Senate legislation, CFTC chief Rostin Behnam disclosed that he has already given the green light to his agency to start preparing to be the lead regulator for a substantial chunk of the bitcoin market.
Gensler maintained throughout the inquiry that the Supreme Court has already decided what constitutes a security and that most tokens pass a well-established multifactor test.
However, Toomey and other opponents of the SEC’s approach find that explanation wanting.