US Congressman Patrick McHenry has openly criticized SEC Chair Gary Gensler for his alleged lack of transparency. During his testimony before the US House Financial Oversight Committee, McHenry did not mince words as he expressed his dissatisfaction with Gensler’s dealings with FTX and its founder, Sam Bankman-Fried.
McHenry highlighted Gensler’s refusal to share information regarding his interactions with the bankrupt cryptocurrency exchange with Congress. He emphasized Gensler’s “lack of responsiveness,” labeling it “unacceptable” in the context of Committee oversight. Under Gensler’s leadership, the SEC has notably enforced regulations within the digital asset industry, engaging in multiple lawsuits against various entities.
However, McHenry pointed out that despite such vigilance, the SEC overlooked one of the same industry’s largest financial crimes in US history. This has led to Congress seeking clarity and answers regarding the SEC’s operations and decisions.
McHenry Challenges Gensler’s Silence on FTX Dealings
“You refuse to be transparent with Congress regarding your interaction with FTX and Sam Bankman-Fried,” McHenry asserted. He mentioned that the committee had made multiple requests for documents to the SEC in February. Still, seven months later, they had not received “a single non-public document that is not part of a FOIA production.”
Gensler’s ongoing lack of transparency regarding his communications with FTX has increased tension between the SEC and the Committee. McHenry emphasized that the SEC is “not above the law” and that compliance from regulators is a routine aspect of Congressional oversight.
Senators Urge Gensler to Pause Crypto Rulemaking
McHenry’s stern warning indicated that the committee’s “patience is wearing thin.” He called for a “path forward,” urging the SEC to respond more to requests. He warned that the committee might have no choice but to issue the first congressional subpoena to the SEC if the current state of affairs continues.
In a recent Ripple, CTO and legal chief Stuart Alderoty speculated that Gensler will maintain his stance on the legal compliance of XRP under securities laws during the U.S. House of Representatives Committee on Financial Services hearing. This, coupled with a group of US senators urging Gensler to halt rulemaking actions, has sparked discussions about the potential ramifications for the crypto industry.