Gensler’s Congressional Showdown
This week’s hearing with U.S. SEC Chair Gary Gensler was as action-packed as a reality TV drama. On September 27, he faced lawmakers who were clearly not pulling any punches regarding his agency’s management of U.S. capital markets and his seeming dodges over questions on Bitcoin and—wait for it—Pokemon cards.
The Kneecapping Remark
One of the most memorable moments of the hearing came courtesy of Representative Andy Barr, who compared Gensler’s regulatory efforts to the infamous figure skater Tonya Harding, who had a rather unsportsmanlike approach to competition. Barr stated, “You are kneecapping the U.S. capital markets with the avalanche of red tape coming out of your commission.” Talk about a metaphor that packs a punch! If Gensler had a physical reaction, it was probably akin to the stunned silence of an ice skater who just found out her rival was pulling a Tonya. This fiery anecdote was undoubtedly aimed at the regulatory hurdles that entrepreneurs and investors are crying over.
Political Aspirations for Gensler
As if the reign of metaphors wasn’t enough, Representative Warren Davidson chimed in with a bold wish: that the Biden administration would simply fire Gensler. Davidson accused him of pursuing a political agenda rather than serving the interests of the capital markets. “You’re making the case for this bill [the SEC Stabilization Act] every day you’re acting as the chairman,” he asserted. Who knew Congress could feel like a scene out of “Survivor”? One can only imagine Gensler’s inner thoughts while absorbing all this feedback—perhaps contemplating a career change?
Bitcoin: Not a Security?
When pressed about Bitcoin’s classification, Gensler managed to assert that it didn’t meet the “Howey test”—the legal precedent used to determine if an asset is a security. McHenry jumped in with a follow-up about Bitcoin being a commodity, but Gensler skillfully ducked the question like he’s in a game of dodgeball. The ambiguity here is thicker than a New York winter coat.
Poke-What? Securities Yes or No?
What really turned heads was when Representative Ritchie Torres questioned whether buying a Pokemon card could be considered a securities transaction. Gensler’s response felt like watching a cat play with a laser pointer—lots of confusion and evasion! He ultimately mentioned that if it’s bought in-store, it’s not a security, but if it’s tokenized and put on a blockchain, well… that’s another kafkaesque kettle of fish. Torres dubbed Gensler’s evasions “deafening and damning.” It seems the SEC might need to revise its definition of what constitutes an investment contract, or at the very least, clarify on its Pokemon policies.
Signs of Defiance
In a twist of irony, Gensler sat behind a “Stand With Crypto” logo, courtesy of Coinbase. What was probably intended as a simple display turned into a juxtaposition of loyalty and challenge. Coinbase’s initiative aims to strike a more positive stance towards cryptocurrency regulation in the U.S., and while Gensler faced accusations of stifling innovation, there it was—a logo championing crypto right behind him shouting, “We’ve got your back!” Or was it more like a silent ‘look how far we’ve fallen’ nod?
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