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- 1 Rep. Ritchie Torres questioned the SEC Chair and got an “incoherent” response.
- 2 After the SEC Chair’s response, many questions were raised about the leadership of Gary Gensler.
According to a media report, along with participants others are also not so satisfied with the current leadership at the Securities and Exchange Commission (SEC). As earlier this week, a vigorous questioning of SEC Chairman, Gary Gensler, by members of Congress from both sides of the political spectrum, was also not “so satisfactory.”
Ritchie Torres’s Cross-examination with SEC Chair
Rep. Ritchie Torres also delivered the most interesting testimony during a five-minute exchange. The congressman from The Bronx sought clarity from Gensler regarding “the precise definition of an investment contract, which ultimately determines which financial instruments fall under the purview of the SEC.”
I cross-examined @SECGov Chair Gary Gensler about the term 'investment contract', which is key to determining his authority over crypto.
— Rep. Ritchie Torres (@RepRitchie) September 27, 2023
Gensler struggled to answer basic questions like whether an investment contract requires a contract. His evasions are deafening and damning. pic.twitter.com/EJcZEHiKGL
During the exchange, Torres raised the question of “whether an investment contract necessitates an actual contract, highlighting that the seminal SEC vs. Howey case involved two contracts.”
His line of questioning echoes a concern shared by many crypto proponents: that the term “investment contract” has been interpreted too broadly, potentially enabling the SEC to classify anything Gensler deems security as such.
Torres remarked, “I worry that when it comes to crypto, your interpretation of the term ‘investment contract’ has no limiting principle and therefore is susceptible to arbitrary and capricious enforcement actions.”
The SEC Chair did not provide a clear answer to Torres’s query regarding “whether an investment contract requires some form of contract to be considered a security.” Gary Gensler argued that existing law grants the agency broad authority.
Nevertheless, the SEC Chair could not cite a case in which an investment contract lacked an actual contract. “I find it telling that you can’t cite a single case,” Torres countered.
SEC Eye on Leading Crypto Exchanges
As per the media report, in many respects, Torres’s position on the issue reflects the divide between the administration and Congress concerning the crypto industry. Meanwhile, the SEC is pursuing legal action against two leading crypto exchanges, Congress is increasingly adopting “a more pro-crypto stance.”
The politicians on Capitol Hill, spanning both the Democratic and Republican camps, are pushing back against the SEC Chair and adopting more crypto-friendly positions. In addition to Torres, there are Republicans such as “Patrick McHenry and Majority Whip Tom Emmer.”
Coinbase, the U.S.-based crypto exchange, is actively working to garner support from influential leaders in the House. On September 27, 2023, Brian Armstrong, the CEO at Coinbase, wrote about the “stand with crypto,” that unites global crypto advocates, as the crypto exchange officially noted.
Here at our nations capital for #StandWithCrypto day with 40 crypto founders from across the country.
— Brian Armstrong 🛡️ (@brian_armstrong) September 27, 2023
It’s time for America to join the rest of the G20 and get some clear rules on the books. pic.twitter.com/oQCBGH2yGY
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
