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US Securities and Exchange Commission (SEC) Chair Gary Gensler has faced intense criticism for his handling of the Debt Box case in a recent congressional hearing.
During a House Financial Services Committee hearing on Tuesday, Republican congressman Tom Emmer grilled Gensler for his stance on the crypto industry.
“We could not have had a more historically destructive, or lawless, chairman of the SEC,” highlighting the unsuccessful lawsuit against Debt Box. "Does the fact that we're talking about this today even slightly embarrass you?"
In response, Gensler admitted that the SEC mishandled the Debt Box case. “Look, the matters in that case were not well-handled and we’ve said that to the court,” he replied to Emmer.
Its Salt Lake City office was accused of exerting "gross abuse of power" by a federal judge in its lawsuit against Debt Box, in which it alleged the platform defrauded investors of investors of at least $49 million.
Ultimately, the SEC shut down its office behind the lawsuit and was ordered by federal district court judge Robert Shelby, who dismissed the SEC's case against the crypto firm without prejudice, to pay $1.8 million in legal fees.
Blockhead
Emmer continued to grill Gensler about the SEC's lack of clarity in regard to the crypto industry. It’s been recently reported that Vice President Harris has finally said she’d craft clear rules of the road for the digital asset space if she becomes president,” Emmer said.
“Is this your approach too, sir, or do you think she’s rebuking you because she doesn’t think you’ve done a good enough job establishing these clear rules over the last three years of her administration?”
Gensler responded by saying, “I think that there’s laws in place. If Congress wishes to change them, they will change them, but we are enforcing the laws and there are many people in this field that are not following the laws.”
Democrat Ritchie Torres also questioned Gensler about whether selling a Yankees ticket would constitute selling a security.
"From the standpoint of federal securities laws, is there a legal difference between buying a Yankee ticket that offers you the experience of a Yankee game and buying an NFT that offers you the experience of an animated web series?" Torres asked.
Gensler replied that it depends on how something is offered and sold and whether the seller is "looking to a common enterprise anticipating profits," citing the Howey Test.
