Tag: Chairman Gensler

Gary Gensler Under Fire for Alleged Political Favoritism in SEC Appointments

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By Vismaya V. (DeCrypt). September 12, 2024.

The U.S. Securities and Exchange Commission (SEC) chair Gary Gensler has come under fire for allegedly hiring civil servants based on political affiliations—a violation of federal law.

The allegations come from a joint letter sent by the House Judiciary, Financial Services, and Oversight Committees. While the allegations don’t appear to overlap with crypto enforcement actions from the regulator, they do arrive at a time when firing Gensler has become one of Republican nominee Donald Trump’s campaign promises as he runs for re-election.

The letter, signed by Judiciary Committee Chairman Jim Jordan (R-OH), Financial Services Committee Chairman Patrick McHenry (R-NC), and Oversight and Accountability Committee Chairman James Comer (R-KY), calls into question the appointment of Dr. Haoxiang Zhu as SEC Director of Trading and Markets.

Read more here: DeCrypt.

Ripple Gets OK To Pause SEC Penalty As It Mulls Appeal

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By Aislinn Keely. (Law360). September 4, 2024.

Law360 (September 4, 2024, 9:34 PM EDT) — A New York federal judge on Wednesday signed off on Ripple Labs’ request to hold off on paying the U.S. Securities and Exchange Commission the $125 million penalty it owes to allow time for either side to appeal the landmark ruling in the agency’s registration case.

The blockchain firm asked U.S. District Judge Analisa Torres earlier Wednesday to delay the monetary portion of her Aug. 7 judgment, which directed Ripple to pay the penalty for failing to register institutional sales of its XRP token. Though Ripple was due to pay up on Friday, Judge Torres allowed a stay until either 30 days after the time to appeal expires, or the resolution of any appeal. 

Read more at: Law360

Court Brings Gavel Down on SEC’s War on Crypto

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By Roslyn Layton. (DC Journal). August 20, 2024.

On August 8, Judge Analisa Torres of the U.S. Southern District of New York issued her judgment on the case brought by the Securities and Exchange Commission against the blockchain payments company Ripple. 

In her 16-page order, Torres brought the District Court’s gavel down on the SEC’s spectacular failure to expand the administrative state beyond what the law allows. The SEC should read the room and move on.

From the moment the SEC filed its case against Ripple in December 2020, the breadth and audacity of its legal assault on the company and its two senior executives rightly dubbed it the cryptocurrency trial of the century. The SEC argued that the XRP token, a digital commodity by any definition, was a security and that all XRP sales between any two parties are investment contracts with Ripple in perpetuity.

Read the full piece here: DC Journal.

How Crypto Money Is Poised to Influence the Election

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By David Yaffe-Bellany, Erin Griffith and Theodore Schleifer. (New York Times). June 17, 2024.

Ryan Selkis, a cryptocurrency executive, was eating dinner at Mar-a-Lago last month when he got an unexpected invitation: Former President Donald J. Trump wanted him to come to the stage and say a few words.

Mr. Selkis, who runs the crypto data firm Messari, was one of a couple hundred attendees at an event celebrating Mr. Trump’s series of nonfungible tokens, the digital collectibles known as NFTs. When he reached the lectern, Mr. Selkis turned to face the former president.

“There’s 50 million crypto holders in the U.S.,” the executive declared. “That’s a lot of voters.”

That message has become a political talking point in the crypto world, as the industry tries to shake off a wave of scandals and establish itself as a powerful force in the 2024 election cycle. Three large crypto firms have banded together to finance a group of affiliated super PACs, investing about $150 million to elect pro-crypto candidates in congressional races.

Read the full piece here: The New York Times.

It’s time to end the SEC’s war on crypto

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By Anthony Scaramucci. (Blockworks). June 6, 2024.

The American government is badly damaged — we need public servants who care more about right or wrong, especially when it comes to the crypto industry.

I’m not denying that there are reasonable questions about how crypto firms should be regulated. Many policy questions still require legislation to resolve. But, our current system is broken.

The Securities and Exchange Commission traditionally does not expose itself and its credibility to an appellate beatdown. But this SEC is different. This SEC and Chair Gary Gensler have an extra-regulatory anti-crypto agenda. And they are using their power to obstruct and delay the industry — imposing their own preferences where they can. 

Gensler may not like bitcoin. But whether you decide to invest in bitcoin is up to you, not the SEC. 

Read the full article here: Blockworks

Why The Securities And Exchange Commission Lost Its War On Crypto

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By Dan Ikenson. (Forbes). May 28, 2024

From banning “non-compete” clauses to re-requiring “net-neutrality” to hyperinflating the costs of taxpayer-funded infrastructure with extravagant union giveaways, the Biden administration has overseen a massive expansion of the regulatory state. But amid this regulatory incontinence, which sows uncertainty, suppresses innovation, and retards investment and growth, there are encouraging signs that Congress, the courts, and US entrepreneurs are fed up with rule by executive fiat.

Take, for example, the escapades of the Securities and Exchange Commission. Since assuming power, Biden’s approach to cryptocurrencies and related technologies has been to delegate and defer to an activist SEC and its crusading chairman, Gary Gensler. Chairman Gensler portrays the crypto industries as “rife with hucksters, fraudsters, [and] scam artists,” which, he seems to believe, excuses him from proposing and promulgating concrete rules, in compliance with statute, for the industry to follow. Instead, Gensler sees crypto companies as undeserving of such regulatory clarity, choosing to keep them off balance through a “regulation by enforcement” approach – aggressively suing crypto companies for non-compliance with securities laws without ever articulating what “compliance” requires.

In the absence of clear, legal pathways, companies in the digital asset space have taken their innovations and expertise to friendlier shores. Governments in places such as the United Kingdom, the European Union, Singapore, and the United Arab Emirates have already established regulatory frameworks and their economies are certain to reap the benefits of the resulting financial and related technological innovations.

Read the full article here: Forbes

The SEC Came to Destroy Crypto, Not to Regulate It

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By Roslyn Layton. (DC Journal). April 3, 2024.

Following the Securities and Exchange Commission’s effort to stretch, bend and twist the law to grant itself authority to regulate cryptocurrencies has been like watching an exhausting video game. By the last level, the monster has grown so grotesque and ridiculous that you’re just waiting for the relief of seeing it explode so the comforting words “game over” can finally appear.

Unfortunately, it’s not a game for many innovative U.S. Financial Tech companies. The SEC has mobilized all its resources to carry out a policy against crypto companies that is not designed to protect investors from fraud or even to clarify what legal compliance means. It is practicing what professor J.W. Verret of George Mason University has called “enforcement by destruction,” trying to turn courts into execution chambers for an industry it never intended to regulate but to destroy.

It comes down to a bait-and-switch strategy by two successive SEC chairmen to claim that every digital asset, no matter how it is designed, is itself a “crypto asset security,” and that gives the agency full authority to require they be registered like stocks. Nothing in nearly a century of securities law provides the SEC such all-encompassing authority over an entire asset class. But the SEC’s strategy was never to prove this theory in court so much as to have a pretext to launch enforcement actions never meant to bring anyone into compliance.

Read the full piece here: DC Journal

Government’s Attack Vectors

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By Kristi Warner

The government’s approach to remedies and bitcoin mining are similar examples of agencies utilizing tools at their disposal to attack the crypto industry. 

Remedies

In July 2023, the SEC lost in the Ripple case on the main legal theories – Judge Torres ruled that secondary market sales were not sales of unregistered securities and XRP itself is not a security. 

Individual XRP holders got their resolution.

Now the case is really at a point where institutional sales and remedies are the focus. The SEC utilizes remedies and reliefs in many cases, and the type of remedies asked for typically varies based on the type of litigation. 

In the Ripple case, the SEC after losing on the legal theories, and vindicating the two executives still wants the company to pay a lot of money in remedies so they can hold the company “accountable”, and right any wrongdoing. 

The irony is that the people the SEC are supposed to be protecting (you and me) were not harmed by any of Ripple’s actions. Instead, it was the SEC’s action that resulted in restricted access, delistings and actual harm to us. 

That is because the SEC has weaponized its authority in an attempt to destroy innovation. Thankfully what we have been seeing in a lot of the cases are ourts keeping the SEC in check. 

The American Government was designed to be a system with checks and balances between the three branches. 

So while I agree we can look beyond the SEC v. Ripple case, I still think lawsuits in general are important to pay attention to as they are key to keeping the government agencies accountable and allow the industry to fight back. 

Bitcoin Mining

Another recent example of this is the RIOT Platforms and Texas Blockchain Council suit against the Biden Administration in a Texas court. 

The backstory is the U.S. Dept. of Energy had decided to conduct an “emergency” survey of the energy use by crypto miners based on its own unwarranted assertion that mining is a threat to the power grid. Allegedly the agency threatened companies with criminal fines and civil penalties if they did not answer the survey. The survey was requested without proper procedure established by law including public notice and comment requirements.

Once again we’re faced with a government agency trying to sidestep the law and bully crypto companies into submission by misusing tools at their disposal.

Solution

How can we combat that? 

In today’s world one solution to maintain the system of checks and balances is heading to Court. That’s what RIOT and Texas Blockchain did and while it was not the exact relief they were seeking, the lawsuit forced the government to halt their survey and destroy the sensitive and confidential information they had already acquired through the survey. 

Same with Ripple – they exposed government overreach by fighting back against the SEC in court. 

These are both huge blows to the government’s war on crypto because when these agencies are committing government overreach, the courts are putting that power in check and forcing them to follow the law. 

Watch the full livecast here: https://www.youtube.com/watch?v=eQxoBShe2CI&t=2s

Gary Gensler’s Blundering SEC Mirrors Biden’s Incompetence

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By Gerard Scimeca. (RealClear Markets). March 6, 2024.

Touting historically low approval ratings rivaling that of paper cuts and hay fever, one might think Joe Biden and his handlers cared enough about voter sentiment to address the more problematic areas of his administration serving to inflame his unpopularity. 

An obvious place to start would be to cut bait with the capricious, reckless, and rogue Chairman at the Securities and Exchange Commission (SEC), Gary Gensler. That Biden has yet to remove the haughty Gensler is an affirmation of all that is wrong with his presidency and the SEC itself, whose continued bungling has drawn the ire of millions of American investors. 

After 10 years of denials, last month the SEC approved a number of spot Bitcoin exchange-traded funds (ETFs), even as Gensler himself continued to denounce them. While the occasion represents a watershed moment for digital assets in the U.S., the approval was given grudgingly by a Commission boxed into a legal corner.

Read more here: RealClear Markets

To Restore the SEC’s Credibility, Appoint a New Chair

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By Rep. Todd Tiahrt. (RealClear Policy). February 21, 2024.

Economic uncertainty is one of the top issues facing the country today. Many Americans have been forced to rethink their spending habits while concerns about job stability and fluctuating market conditions are leading families to focus more on savings and debt reduction as they prepare for potential financial challenges ahead.  

To guide the United States through this tumultuous period, it is crucial to have trustworthy and reliable regulators who can stabilize markets during a crisis and who will collaborate with American businesses throughout such instability. That is why it is difficult to comprehend why Gary Gensler remains President Joe Biden’s chair of the Securities and Exchange Commission (SEC). It is even a puzzle why President Biden selected him in the first place.

After a scandal-tinged tenure as President Barack Obama’s chairman of the Commodity Futures Trading Commission (CFTC), Gensler has led a series of gaffe-prone crusades against American companies as SEC Chairman with embarrassing results. A recent study found that most of the flurry of proposed and finalized rules under Gensler was not tied to any authority granted to the SEC by Congress. He has mostly freelanced, letting politics and press releases guide his actions rather than the letter of the law.

Read more here: RealClear Policy