SEC Chair Faces First Major Scrutiny and Will Testify Before US Congress Over Crypto Rules

Over the last few months since the collapse of crypto exchange FTX, SEC chair Gary Gensler has been actively cracking down on crypto firms and other market players.

Recently, the U.S. Securities and Exchange Commission (SEC) also slammed a Wells Notice to even big and regulated players like Coinbase alleging that some cryptocurrencies listed on the crypto platform violated the US securities laws.

However, the US Congress is now likely to extend its oversight on the securities agency as SEC Chair Gary Gensler will soon testify before the Financial Services Committee for the very first time next month on April 18.

Patrick McHenry, chairman of the Financial Services Committee, recently spoke in an interview with Punchbowl News, stated that Genselr will have to justify his actions in the crypto industry during his next testimony.

The United States House Committee on Financial Services overseas the entire financial industry of the United States across asset classes like securities, banking, and crypto assets. Earlier this year, Patrick McHenry, a Republican from North Carolina, took the office and soon after he established the Digital Assets Subcommittee in January 2023 addressing the structural gap in FSC’s approach of handling digital assets.

Representative French Hill (Republican) is currently heading this Digital Assets Subcommittee with representative Warren Davidson (Republican) as his deputy. Both of them are known for their pro-crypto approach and friendliness.

FSC Chairman Patrick McHenry wants to make the oversight of the SEC an important part of his chairmanship tenure. The upcoming hearing of the SEC chair shall provide more clarity on Gensler’s rule making and his approach to crypto assets.

McHenry said: "This will be our first oversight hearing of the Securities and Exchange Commission. This will be about his rulemaking and his approach to digital assets. It will have a large general oversight over the SEC. In terms of policy, [this will be] a serious approach in terms of us laying down […] a regulatory sphere for digital assets”.

He also added that he shall closely monitor the issue of crypto regulations in the coming months. “I’m glad that we were able to announce that and get that going. This will be the first of many regulatory hearings throughout the summer,” the chairman continued.

Amid the strong action by the US SEC in recent times there been a chatter in the crypto space that regulators are unleashing Operation Choke Point 2.0. Back in 2014, law firm Cooper & Kirk had sued top regulators like the OCC, FDIC, and the Fed over the original operation Choke Point 1.0.