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Three committee chairs in the US House of Representatives wrote to US Securities and Exchange Commission (SEC) Chairman Gary Gensler demanding a more satisfactory response to their Nov. 1 letter regarding SEC and agency compliance with record keeping requirements.
Judiciary Committee Chairman Jim Jordan, Oversight Committee Chairman James Comer and Financial Services Committee Chairman Patrick McHenry said the response they received from Gensler to their inquiry did not address the direct requests contained in their letter. Specifically, they requested confirmation that the SEC complies with federal record keeping and transparency rules and that Gensler and his subordinates did not use personal email accounts to conduct official business, as well as clarification from the agency on the definition and use of “off-channel communication.”
Congressmen, along with Representative Tom Emmer, responded to a Wall Street Journal report that criticized the SEC and other agencies for poor record keeping. “Government officials regularly engage in the same record-keeping scams for which they were recently fined [SEC] Wall Street group,” the report says. In particular, the article noted the use by officials of chat rooms for government business, which are not searched to comply with subsequent Freedom of Information Act (FOIA) requests.
1/ SEC Chair Gary Gensler has wrongly prejudged that all digital assets are securities.
As a result, federal law requires that he recuse himself from all enforcement decisions related to digital assets.@MTCoppel and I wrote a paper explaining why https://t.co/xgJ09o4SPS
— Jake Chervinsky (@jchervinsky) June 29, 2023
The new letter reiterates the original requests and adds: “If you do not intend to comply with any or all of requirements #1-5 above, describe the factual and legal basis for your non-compliance.” The June 28 letter pointed out inconsistencies in Gensler’s public meeting schedules for 2021. Cryptocurrency mentioned.
Related: Coinbase Seeks SEC Lawsuit Dropped, Alleging Extreme Breach of Process
The following day, Gensler became the target of cryptocurrency-related criticism when the Blockchain Association released a paper arguing that Gensler should step back from making digital asset enforcement decisions. The newspaper claimed:
“In the digital asset space, the SEC has all but abandoned its role as a rule-making body. Key questions of existential relevance to the digital asset industry remain unresolved, chief among them the question of whether a digital asset represents a “security” and when, if so, when.”
Gensler has “clearly expressed his opinion” that all digital assets other than Bitcoin (BTC) are non-registered securities and all digital asset trading platforms are non-registered securities exchanges, the document said, citing multiple statements by the SEC chairman. These statements show that Gensler anticipated “everything but Bitcoin,” he continued, and:
“Due process requires not only that decision makers act impartially, but that they avoid even the appearance of bias.”
Recipients of the Wells notice can seek a removal of Gensler through the SEC or in federal court, the newspaper recalls.