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US House FSC Threatens to Subpoena SEC Over Crypto Regulation, SBF Charges
The SEC has until May 19th to respond to the inquiries or the Committee will schedule a testimony at the earliest possible date.
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On Wednesday, May 10th, Representatives Patrick McHenry and Bill Huizenga sent a letter to SEC’s Gary Gensler. The document calls on the SEC to offer adequate replies to the Committee’s previous inquiries into the Commission’s charges against Sam Bankman-Fried, as well as on its actions surrounding digital assets and the proposed climate rule.
Financial Services Committee Requests Answers on Digital Assets, SBF by May 19th
This Wednesday, Representatives Patrick McHenry and Bill Huizenga, the House Financial Services Committee Chairman and Investigations Subcommittee Chairman sent a letter to SEC’s Gary Gensler requesting the SEC adequately respond to several previously made inquiries.
The Congressmen also criticized the SEC for its failure to offer a satisfactory answer previously citing its numerous staff including around 150 lawyers. The Representatives are primarily interested in additional information on the proposed climate rule, and the Commission’s actions with regard to digital assets.
They also requested additional details on the SEC’s charges against the former CEO of FTX, Sam Bankman-Fried. According to the letter, the Commission has until 5 PM on Friday, May 19th, to respond. If it fails to do so, the Committee will schedule a testimony based on the Commission’s schedule.
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Lawmakers’ Previous Clashes With SEC Chair Gary Gensler
Various lawmakers, mostly from the Republican party, have been vocal critics of the SEC’s approach to digital assets for years. Perhaps most notably, Representative Tom Emmer has criticized the Commission when it comes to its actions pertaining to cryptocurrencies even calling it a “shakedown authority” in the summer of 2022.
Patrick McHenry has also been critical of the SEC approach for some time. He famously challenged Gary Gensler during a recent testimony asking him whether Ethereum can be considered a security but received no clear answer. The Representative also already sought, and is again seeking in today’s letter, more clarity on how cryptocurrency firms can register with the Commission.
Various voices from within the industry, Coinbase likely being the most notable example, have on multiple occasions criticized the Commission for its lack of willingness to communicate with the firms that wish to remain compliant. Hester Peirce, a Republican Commissioner within the SEC, has raised a similar point following several of her agency’s various recent actions pertaining to digital assets.
Do you think the SEC will comply with the Representatives’ inquiry before the deadline? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
