Gary Gensler Crypto Game: Stealing the Congressional Spotlight to Light the SEC's Way

Author: John Roberts, Fortune Crypto; Compiler: bayemon.eth, ChainCatcher

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Due to the special decentralization system in the United States, the current embarrassing situation of encryption regulation in the United States stems from the lack of a unified cognitive framework among various regulatory agencies. Over the years, agencies such as the SEC, CFTC, and the U.S. Congress have been fighting and fighting over the jurisdiction of encryption, which has caused a delay in legislation to a certain extent, and further created a lack of clarity about encryption policies that cannot be followed. At present, a very delicate situation has formed in the United States, that is, because the CFTC only has regulatory power over the derivatives market and has limited power in the spot market, it is indeed impossible to directly compete with the SEC, and all parties are increasingly dissatisfied and complained about the SEC strong. Public opinion and various forces are calling on the U.S. Congress to intervene in a timely manner and finally pass legislation to solve the problem.

Therefore, we have also recently seen that two members of Congress have submitted a bill to remove SEC Chairman Gary Gensler, and Coinbase and other local encryption institutions in the United States have publicly called for regulatory clarity only by relying on Congress or case law. However, some lawyers analyzed that even if people hope that the country will formulate regulatory laws and regulations as soon as possible, this process may take longer than the SEC to make clearer actions.

"Fortune" published an article today about the SEC chairman playing with the media to try to cover up Congress' actions in the field of encryption, and sorted out the timeline. The article is very interesting, and we may get a glimpse of some US regulatory trends from it.

Gary Gensler is a master at juggling the media. Last October, the SEC chairman released a video on a Monday morning announcing that the SEC would fine Kim Kardashian for her subtle role in promoting a cryptocurrency. Although this seemingly insignificant event occurred in June 2021, a mix of celebrity scandals and the timing of the release nearly drowned Gensler and the SEC in the deluge of news coverage.

The cryptocurrency industry has long resented such "gimmicks," arguing that Gensler should focus on creating a regulatory framework for digital assets. But recently, because Gensler has used his influence on media issues to divert attention from Congressional cryptocurrency legislative proposals, he has instead focused the world's spotlight on his own SEC.

In early June, when the House Agriculture Committee held a hearing titled "The Future of Digital Assets," it aimed to determine the gap between current regulatory options and reality. However, on the morning of the hearing, the SEC suddenly launched a lawsuit against Coinbase, just a few hours before the agency also sued Binance, the industry's largest exchange. As a result, there is no doubt that the hearings and the media have reported on the SEC's lawsuits, and the so-called perfection of the regulatory plan has long been left behind.

The timing of the SEC’s lawsuit may be a coincidence, but it fits with the agency’s pattern of cryptocurrency-related announcements at previous hearings. As the chart below shows, Fortune found six such examples in 2023 alone.

Note*: The picture has been compiled by ChainCatcher

**Although it is a "coincidence" that several lawsuits and hearings coincide with the SEC, it is clear that the SEC has other means to keep itself firmly in the center of the spotlight. For example, the SEC has twice released a cryptocurrency-focused video titled “Office Hours with Gary Gensler” on the day of legislative hearings. **

In an interview with Fortune, cryptocurrency industry executives expressed outrage at these tactics. An executive, who did not want to be identified lest Gensler retaliate, complained to Fortune that the SEC chairman was trying to interfere with the normal agenda of Congress through his actions, accusing him of trying to thwart the legislature's efforts. **However, there is currently no clear evidence or statute that Gensler's conduct was improper. **

Jonathan Adler is a professor at Case Western Reserve University and a specialist in administrative law research. He pointed out that **heads of agencies like Gensler are political appointees and behave in keeping with that status. **

According to Adler, the heads of institutions like Gensler often have policy agendas to pursue, and these agendas are mainly about explaining to the public what the agency wants to achieve and what efforts are being made to achieve it. Over the years, only a handful of agency heads, notably the late Federal Trade Commission (FTC) Chairman Michael Pertschuk, have been able to publicly respond to public questions about their regulatory integrity. But Adler said that while the cryptocurrency industry may be unhappy with Gensler's attempt to block legislative progress, Gensler's actions are not crossing the line. **