All five commissioners of the Securities and Exchange Commission made an appearance on Capitol Hill on Tuesday to face questions from lawmakers. While all commissioners were under scrutiny, much attention was directed towards SEC Chair Gary Gensler.
Congressman Tom Emmer, R-MN., seized the opportunity to question Gensler regarding the DEBT Box case, in which the SEC faced sanctions. The presiding judge criticized the SEC for “bad faith conduct” and a “gross abuse of power.”
In response to Emmer’s inquiry, Gensler admitted that the handling of the DEBT Box case was not up to par and acknowledged the court’s concerns. Reports later surfaced that two SEC lawyers involved in the case had left the agency, and the SEC decided to close its Salt Lake Regional Office. Emmer pressed Gensler for clarification on the lawyers’ departure, to which Gensler stated that they had taken on other employment opportunities.
Emmer continued to challenge Gensler, pointing out a footnote in a recent filing related to the SEC’s case against Binance. Emmer accused Gensler of making unsubstantiated claims regarding “crypto asset securities” without providing clear guidelines, leading to confusion within the industry.
In a bipartisan exchange, Congressman Ritchie Torres, D-NY, questioned Gensler on the classification of Yankees tickets as securities. Drawing a comparison to the Stoner Cats NFT case, Torres highlighted the complexities of defining investment contracts in the digital age.
Before concluding the hearing, Congresswoman Erin Houchin, R-IN., sought insights from Commissioner Hester Peirce on the SEC’s regulatory approach towards cryptocurrency. Peirce emphasized the need for clear rules and guidelines to avoid excessive enforcement actions.