Congressman Tom Emmer has stated that the Supreme Court’s decision to overturn Chevron deference significantly limits “the regulatory abuses” of U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler. The ruling is seen as a game changer for the crypto industry and other tech sectors, promising more predictable and grounded regulations. Supreme Court’s Chevron Ruling […]
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Billionaire Mark Cuban Warns Gensler’s SEC Crypto Policies Could Cost Biden the Election
Billionaire Mark Cuban has criticized U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler’s handling of crypto regulations, suggesting it could harm Biden’s election chances. “Gensler has not protected a single investor against fraud,” he stressed. “All he has done is make it nearly impossible for legitimate crypto companies to operate.” ‘This Is Also a […]
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SEC Chair Gary Gensler’s Social Media Post Led Some to Believe He Was Resigning
U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler’s social media post expressing that “it’s been an honor to serve” as SEC chairman sparked speculation within the crypto community that he might be resigning from his position. Many people, including lawmakers, have criticized Gensler for taking an enforcement-centric approach to regulating the crypto industry. Gary […]
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Former SEC Official Says Gary Gensler’s Legacy Could Be the Approval of Spot Bitcoin ETF
The U.S. Securities and Exchange Commission’s former head of internet enforcement, a crypto skeptic, now believes that the SEC is likely to approve a spot bitcoin exchange-traded fund (ETF). He further expressed that “the legacy of SEC Chair Gary Gensler could be the approval of a spot bitcoin ETF,” emphasizing: “That is a mammoth victory for big crypto.”
Stark Now Expects SEC to Approve Spot Bitcoin ETF
Former U.S. Securities and Exchange Commission (SEC) official John Reed Stark now believes that the securities regulator is likely to approve a spot bitcoin exchange-traded fund (ETF). Stark is currently president of cybersecurity firm John Reed Stark Consulting. He founded and served as chief of the SEC Office of Internet Enforcement for 11 years. He was also an SEC enforcement attorney for 15 years.
This week, the SEC reportedly made “rare” calls to spot bitcoin ETF filers regarding their applications. Fox Business journalist Eleanor Terrett shared on social media platform X Thursday: “Sources that were on the call tell me it was to do with making sure everyone is doing cash creates. The SEC asked issuers to remove all hints of in-kind redemptions from their filings.”
Commenting on Terrett’s statement, Stark opined on X Friday: “Interesting. If these posts are true, some iteration of a spot bitcoin ETF seems likely.” While emphasizing that “Precisely what the characteristics of an approved bitcoin spot ETF will entail remains to be seen,” the former SEC internet enforcement chief stated:
Under any circumstance, the legacy of SEC Chair Gary Gensler could be the approval of a spot bitcoin ETF. That is a mammoth victory for big crypto. Strange days indeed.
Until now, Stark had maintained his skepticism about the SEC approving a spot bitcoin ETF. He said earlier this month that “the reported 90% likelihood of the SEC’s approval of a bitcoin spot ETF” is “absolutely absurd,” referencing Bloomberg’s analysts predicting a 90% chance of the SEC approving this investment product by Jan. 10.
The former SEC official has long been a crypto skeptic. He believes that crypto prices go up for two reasons. The first is “because there is no regulatory oversight to prevent market manipulation” and the second is “because people are able to sell hyped, FOMO’d, and overpriced crypto to a ‘greater fool,’ whether or not the crypto is overvalued.” He has cautioned several times that “crypto regulatory onslaught will never end.” Earlier this month, he warned of the end of crypto exchange Binance.
What do you think about the statements by former SEC internet enforcement chief John Reed Stark? Let us know in the comments section below.
US Lawmaker Blasts SEC for Deliberately Obfuscating Crypto Regulations — Questions Chair Gensler’s Personal Agenda
A U.S. lawmaker has slammed the Securities and Exchange Commission (SEC) for having a deliberate policy preference to provide less clarity to the crypto market. “The SEC is not adhering to the law. That’s why it keeps losing in court,” said Congressman Tom Emmer as he questioned SEC Chair Gary Gensler’s personal agenda.
‘SEC Has a Deliberate Policy Preference to Provide Less Clarity to the Marketplace’
House Majority Whip Tom Emmer (R-MN) slammed the U.S. Securities and Exchange Commission (SEC)’s approach to the regulation of the crypto industry on Tuesday at a hearing of the House Subcommittee on Digital Assets, Financial Technology and Inclusion titled “Fostering Financial Innovation: How Agencies Can Leverage Technology to Shape the Future of Financial Services.”
The lawmaker posted on social media platform X after the hearing:
If it wasn’t obvious before, it’s certainly obvious now: The SEC has a deliberate policy preference to provide LESS clarity to the marketplace instead of more clarity. Complete disservice to our great capital markets.
Among the witnesses who testified in the congressional hearing was Valerie A. Szczepanik, director of the SEC’s Strategic Hub for Innovation and Financial Technology (Finhub).
Referencing a speech titled “Digital Asset Transactions: When Howey Met Gary” given by William Hinman in June 2018 when he was the director of the Division of Corporation Finance at the SEC, Emmer explained that in this speech, Hinman discussed “how tokens can morph from securities to non-securities and he stated that ether is not a security.”
Citing Szczepanik’s review of Hinman’s draft speech, the congressman quoted her as saying at the time that providing “less detail in a speech is better because the concept of a token morphing from a security to a non-security was a new concept and would generate a lot of discussions.” Emmer emphasized:
You thought the SEC should give less clarity to the market rather than more … When the industry complains about a lack of clarity, I see this as a deliberate policy reference. Does the current SEC chair share that view?
Szczepanik declined to comment on the current chair’s view.
Congressman Emmer proceeded to ask Szczepanik whether Finhub has “issued any guidance since Chair Gensler took office to clarify how security laws apply to crypto.” After the Finhub director failed to provide an answer, Emmer said: “I take the answer is no, because it is no. It seems to be rulemaking through enforcement actions.”
Concerning Hinman’s speech stating that ether is not security, Emmer asked Szczepanik: “Is that your view today?” However, she declined to answer, stating that she couldn’t comment on a particular asset. The congressman concluded:
The SEC is not adhering to the law. That’s why it keeps losing in court. Does the chairman of the SEC tell you to adopt positions to further a specific goal, his own personal goal rather than allegiance to the law?
Szczepanik replied: “I can’t comment on any matters that are pending litigation.”
Emmer has repeatedly criticized the SEC and Chair Gensler for their enforcement-centric approach to regulating the crypto industry. In June, he joined Rep. Warren Davidson in supporting the SEC Stabilization Act that seeks to fire Gensler as the chair of the securities regulator. The House of Representatives recently adopted an amendment Emmer attached to the Financial Services and General Government Appropriations Act of 2024 that limits the authority of the SEC to carry out enforcement actions against the crypto industry. In November, the lawmaker from Minnesota urged Congress to spend resources to “bring more crypto activity and opportunities onshore to bolster U.S. national security.”
Do you agree with Congressman Tom Emmer about the SEC and do you think SEC Chair Gary Gensler has a personal agenda in regulating the crypto industry? Let us know in the comments section below.
Congressman Calls for Gensler’s Removal After SEC Sues a Crypto Exchange Twice in 10 Months
A U.S. lawmaker has urged Congress to pass his bill that would fire U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler. This call followed the securities regulator filing a second lawsuit against crypto exchange Kraken this year after the exchange paid million to settle the initial lawsuit.
Lawmaker Seeks to Fire Gary Gensler
Congressman Warren Davidson (R-OH) has called on Congress to pass his bill that would fire Gary Gensler as the chairman of the U.S. Securities and Exchange Commission (SEC) after the securities regulator sued crypto exchange Kraken twice in 10 months. Rep. Davidson wrote on social media platform X on Tuesday:
Now would be a great time to pass my SEC Stabilization Act and fire Gary Gensler.
On Monday, the SEC filed its second lawsuit this year against Kraken for operating a crypto trading platform “as an unregistered securities exchange, broker, dealer, and clearing agency.” The initial charge in February pertained to the crypto exchange’s staking program, resulting in a settlement with the SEC and a million payment by Kraken.
Jesse Powell, Kraken’s co-founder and former CEO, wrote on social media platform X on Monday: “USA’s top decel is back with another assault on America … I thought we settled all their concerns for m in Feb. Now they’re back for seconds?” He stressed:
Message is clear: M buys you about 10 months before the SEC comes around to extort you again. Lawyers can do a lot with M but the SEC knows that a real fight will likely cost 0M+, and valuable time. If you can’t afford it, get your crypto company out of the U.S. warzone.
Commenting on Powell’s statements, lawyer John Deaton opined on X: “Gary Gensler is a despicable and dishonorable regulator. He knew that Kraken believed it was buying peace for the M.” He explained that in a court case, “M takes you only so far, like maybe only 1/3 of the way — if you’re lucky. Ask Ripple and Brad Garlinghouse who spent 0M plus so far, and is still paying millions in legal fees.”
Rep. Davidson introduced the SEC Stabilization Act in June to remove SEC Chair Gary Gensler in order to safeguard U.S. capital markets “from a tyrannical chairman.” He explained that the bill would “remove the role of chairman,” noting: “It would preserve the current commissioners but it would add a sixth commissioner so there would be no more than three from any one political party.”
Do you think SEC Chair Gary Gensler should be fired? Let us know in the comments section below.
SEC Chair Gensler’s Alleged Past Interest in Advising Binance Surfaces Amidst Legal Battle
Lawyers for Binance claim that current U.S. Securities and Exchange Commission (SEC) chair Gary Gensler once sought to become an advisor for the exchange back in 2019. This purported application occurred while Gensler was teaching at the Massachusetts Institute of Technology (MIT) and coincided with his discussion of the crypto network Algorand during a blockchain seminar.
Ethical Concerns Arise as Binance Lawyers Accuse SEC Chair Gensler of Past Interest
Legal representatives from Gibson Dunn and Latham & Watkins, defending Binance after the SEC filed 13 charges against the platform, suggest that commission chair Gary Gensler expressed interest in advising Binance a few years prior. According to these attorneys, Gensler engaged in multiple talks with Binance executives in March 2019 and allegedly dined with Binance’s founder Changpeng Zhao (CZ) in Japan.
At the time, Gensler was not the SEC chair and held a teaching position at MIT in Massachusetts. He worked for the university’s Sloan School of Management where he conducted several blockchain seminars. Gibson and Latham’s lawyers maintain that CZ and Gensler remained in contact after their meeting in Japan. Despite these supposed ties, the SEC informed CNBC that Gensler is aware of his ethical responsibilities. The agency responded by saying:
Chair [Gary Gensler] is very familiar with and in full compliance with his ethical obligations including any recusal obligations.
This isn’t Gensler’s first brush with allegations of pre-judging matters and breaching recusal commitments. Following an interview with New York Magazine’s Intelligencer reporter Ankush Khardori, Ripple’s chief legal officer Stuart Alderoty contended that Gensler should “recuse himself from voting on any enforcement case that raises that issue.” At the time, Alderoty believed that the SEC chair had “prejudged the outcome.”
Additionally, the crypto community has criticized Gensler for his perceived endorsement of Algorand (ALGO). In one notable MIT video, Gensler calls Algorand a “great technology” and suggests it has potential to be utilized for a system akin to Uber. Many view Gensler’s remarks as an endorsement for ALGO, comparable to Kim Kardashian promoting EMAX.
What are your thoughts on the alleged past ties between SEC chair Gensler and Binance? Share your thoughts and opinions about this subject in the comments section below.
Lawyer Expects SEC to Lose if It Sues Coinbase Due to ‘Fatal Flaw’ of Gary Gensler’s Own Making
A lawyer has explained why the U.S. Securities and Exchange Commission (SEC) will likely lose if the regulator takes crypto exchange Coinbase to court over alleged securities law violations. “The problem is entirely of Gary Gensler’s own making,” he stressed.
Lawyer Expects SEC to Lose Against Coinbase in Court
Lawyer James Murphy explained in a series of tweets Wednesday why he believes the U.S. Securities and Exchange Commission (SEC) will lose if it takes Coinbase to court. Murphy started law firm Murphy & McGonigle in 2010 to represent clients in the securities and banking industries. The firm pivoted in 2017 toward representing emerging companies that leverage blockchain technology.
Referencing a Wells Notice, a formal communication that typically precedes a lawsuit, that the securities regulator sent the Nasdaq-listed cryptocurrency exchange in March, the lawyer opined:
If the SEC follows through on its threat to sue Coinbase, I believe the SEC will lose. The SEC’s case has a fatal flaw. And the problem is entirely of Gary Gensler’s own making.
Murphy explained that SEC Chairman Gensler himself said in his testimony to Congress on May 6, 2021, that the SEC does not have the authority to regulate cryptocurrency exchanges. Gensler’s testimony followed his confirmation by the U.S. Senate on April 14, 2021, to serve as chair of the SEC. He was sworn into office on April 17, 2021.
If the SEC files a lawsuit against Coinbase, the crypto exchange’s legal team “will surely zero in on the communications within the SEC leading up to Gensler’s May 6, 2021 testimony,” Murphy said, adding that “All testimony of an SEC Chairman is thoroughly vetted internally before they testify.”
Murphy stressed: “So there will be emails, meeting notes, memos, text messages, chats, and deposition testimony showing that: There was a consensus within the SEC that it lacked legal authority from Congress to regulate crypto exchanges.”
He continued:
If they sue Coinbase, the SEC’s lawyers will have the unenviable task of trying to explain away their own chairman’s testimony to Congress and all the documents and discussion that preceded it internally within the SEC … It’s a highly embarrassing prospect for the SEC.
“Even more damaging will be all the discovery Coinbase will conduct around Gensler’s decision to pull a 180-degree reversal and suddenly claim that the SEC does have the authority to regulate crypto exchanges in the absence of any Congressional authorization,” the lawyer emphasized. “His unequivocal testimony before Congress and his bizarre 180-degree reversal make Gary Gensler himself the star witness at trial — for Coinbase.”
Do you think the SEC will lose against Coinbase if it takes the crypto exchange to court over alleged securities law violations? Let us know in the comments section below.
This Is What Gensler’s Confirmation Could Mean For XRP
After an impressive rally in the past days, XRP is currently moving sideways trading at ,76 with 2.7% losses in the 24-hour chart. However, the confirmation of Gary Gensler as the Securities and Exchange Commission (SEC) Chairman by the U.S. Senate could bring further benefits to the token.
With 53 votes in favor and 45 against, the U.S. Senate gave “a warm congratulations” to Gensler. The new SEC chairman has a seemingly more positive stance towards cryptocurrencies.
Before returning to public service, Gensler taught a course on cryptocurrencies and blockchain technology at the Massachusetts Institute of Technology (MIT).
Therefore, he is expected to exercise more “balanced” actions during his administration. The regulator has a legal proceeding open against Ripple Labs and two of its executives for the alleged illegal sale of a security, XRP.
Gensler’s arrival could exert a positive influence on a case that, many within the XRP community, consider unfair or disproportionate. Numerous members of the crypto industry have called for regulatory clarity from authorities in the United States.
"A warm congratulations to Gary Gensler on his Senate confirmation to become Chair of the SEC. He will be joining a dedicated staff that works tirelessly day in and day out on behalf of investors and our markets. 1/2
— SEC_News (@SEC_News) April 14, 2021
A new approach to XRP’s case
Lawyer Stephen Palley said Gensler is not “an enemy of crypto”, adding the new SEC Chair could give the green light on more pro-crypto initiatives like SEC Commissioner Hester Peirce’s “safe harbor proposal”. Palley also said:
My own view, which I have slowly and somewhat grudgingly come to, is that current regs & caselaw don’t make sense when applied (unevenly) to crypto projects that require tokens for functionality.
The lawyer stated Gensler’s approach could be conventional but have a “pragmatic and practical” motivation to change some SEC regulations. In doing so, the enforcement priorities could get “clearer”. Palley added:
Like if a current platform seems pretty clearly to be a securities exchange under the ’34 act and the SEC is letting it ride. perhaps some informal guidance about when a web interface to an on-chain swap protocol is or is not a national securities exchange.
Commissioner Peirce Safe Harbor has been uploaded to GitHub and, although is not an official SEC regulation, has been getting a lot of feedback from the crypto community.
The “Safe Harbor 2.0” contemplates a “Time-limited exemption for Tokens”. This proposal seems to have a more dynamic approach to crypto regulation and the evolution of a token.
Therefore, an asset like XRP could have been offered and sold as a security and then traded “outside of an investment contract”. In doing so, the Token can become part of a decentralized network and no longer be susceptible to traditional securities regulation.
To achieve this status, as XRP seems to have, the token must be “freely” tradeable and distributed to a diverse group of “participants in the network”. The proposal adds:
The application of the federal securities laws to the primary distribution of Tokens and secondary transactions frustrates the network’s ability to achieve maturity and prevents Tokens sold as a security from functioning as non-securities on the network.