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US Securities and Exchange Commission (SEC) Chair Gary Gensler is set to testify before a congressional committee over his agency's approach to digital assets.
Representative Patrick McHenry, chairman of the Financial Services Committee, announced yesterday that Gensler will face the House Financial Services Committee on 18 April 2023.
"This will be our first oversight hearing of the SEC, this will be about his rulemaking and his approach to digital assets," McHenry said in an interview. "In terms of policy, it will be a serious approach to us laying down a regulatory sphere for digital assets."
#NEW: Chairman @PatrickMcHenry confirms @SECGov Chair Gary Gensler will testify before the House Financial Services Committee on April 18th.
— Financial Services GOP (@FinancialCmte) March 28, 2023
Republicans will hold @GaryGensler accountable for his flagrant disregard for the law, jurisdiction, and the APA.
📺👇 pic.twitter.com/XRwcrm79PS
US House Committee on Financial Services Republicans shared footage of McHenry's announcement on Twitter with the caption, "Republicans will hold @GaryGensler accountable for his flagrant disregard for the law, jurisdiction, and the APA."
Gensler vs. crypto
Gensler and the SEC have strengthened their regulatory grip on crypto assets, but their approach hasn't been welcomed.
Just this week, share prices of Coinbase Global, the largest cryptocurrency exchange in the United States took a hit as it prepares for battle with the SEC.
Analysts downgraded the company's rating and reducing its price target after the SEC sent the exchange a Wells Notice last week. Multiple Coinbase products are coming under regulatory scrutiny, including an unidentified portion of listed digital assets, Coinbase Earn, Coinbase Prime, and Coinbase Wallet.
Read more: Coinbase Shares Fall as Exchange Prepares for Battle With SEC
The SEC also took aim at decentralized exchange SushiSwap and its CEO Jared Grey, issuing them a subpoena.
Read more: SushiSwap Served With SEC Subpoena
Gensler himself has repeatedly stated that crypto token products are securities and thus crypto trading platforms must register with the SEC.
Its stance forced Kraken to close its staking services. Gensler also argued that Ether's move to proof-of-stake shifts it to being a security.
Enforcement staff at the SEC issued to BUSD issuer Paxos a Wells notice, which the financial watchdog uses to inform companies and individuals of possible enforcement action. Its notice alleges that BUSD is an unregistered security as the SEC declared that crypto staking services violate security laws.
CFTC vs. SEC
The SEC's crypto stance has also proved unpopular among other US regulators.
Earlier this month, the Commodity Futures Trading Commission (CFTC) stated that Ether and stablecoins should be treated as commodities; an opposing view to Gensler's.
Read more: Sorry SEC, Stablecoins Are Commodities According to CFTC
CFTC chair Rostin Behnam believes that Ether is a commodity and should be overseen by the CFTC; a view held by the body in its complaint against FTX founder Sam Bankman-Fried in December.
“Notwithstanding a regulatory framework around stablecoins, they’re going to be commodities in my view,” Behnam said. “It was clear to our enforcement team and the commission that Tether, a stablecoin, was a commodity."
Ripple's XRP has recently been surging since CFTC sued Binance and its founder Changpeng Zhao for offering crypto derivative products not that were not registered in the US. The lawsuit referred to Bitcoin, Ethereum, Tether and BUSD as commodities, rather than securities; again to the contrary of the SEC.
Read more: XRP Hits Five-Month High Thanks to CFTC's Binance Lawsuit
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