The Blockchain Association, a prominent cryptocurrency advocacy group, has published a paper expressing concern about the role of Securities and Exchange Commission (SEC) Chairman Gary Gensler and the legitimacy of his statements and enforcement actions in the crypto industry. industry.
The group argues that Gensler’s involvement in digital asset matters should be reconsidered, citing a perceived bias and failure to provide clear guidance as their primary concerns. The association has advanced in an open letter the allegation that Gensler is overstepping his authority granted by Congress.
“As this anti-crypto campaign has intensified, the SEC has neglected one of its fundamental functions: public regulation and guidance that empowers investors, entrepreneurs and the public to know whether securities laws apply to their products or services,” wrote the association in its open letter. “Instead of clarifying whether and when a digital asset should be classified as a security, Chairman Gensler’s actions have further muddled the regulatory waters, forcing legal crypto companies to rethink the status of their U.S. operations.”
This lack of clarity on the securities issue related to the crypto industry, the paper details, is detrimental to investors, entrepreneurs and the general public. The open letter further accuses the SEC chairman of harboring a clear bias against the crypto industry, suggesting that Gensler’s alleged bias against all digital assets as securities – with the exception of Bitcoin – undermines the due process rights of those who face enforcement action. As such, the association argues that Gensler’s involvement in such actions should be limited because of this perceived bias.
Arrangement of broad brush strokes
The paper delves into Gensler’s history of tackling the securities issue, which critics say ignores the unique circumstances behind each token’s creation and existence and the absence of the legal processes necessary to draw those boundaries.
“As a matter of substance“Chairman Gensler is wrong,” the union claims. “It is black-letter law that determining whether a particular instrument or transaction constitutes an “investment contract” requires a fact-intensive investigation of the kind Chairman Gensler refuses to conduct.”
1/ SEC Chairman Gary Gensler has wrongly posited that all digital assets are securities.
As a result, federal law requires him to back off from all enforcement orders related to digital assets.@MTCoppel and I wrote a paper explaining why
https://t.co/xgJ09o4SPS
— Jake Chervinsky (@jchervinsky) June 29, 2023
The paper further notes that prior to Gensler’s appointment as SEC chairman, the regulatory body recognized the fact that circumstances exist where a digital asset would not be regulated as a security. The Blockchain Association is referring to the recent disclosure that came after a court-ordered release of a slew of digital documents related to a 2018 speech by former SEC director William Hinman revealed that the director did not view Ether as a security. The Hinman emails also detailed SEC employees’ differing opinions on crypto regulation.
Blockchain Association Chief Policy Officer Jake Chervinsky has stated that the digital asset industry cannot expect a fair assessment from Gensler. He has called on the chairman to withdraw from all decisions related to digital asset enforcement. If Gensler fails to comply, Chervinsky expects the issue of Gensler’s refusal to be raised in SEC litigation and federal district courts.
The Blockchain Association’s release comes as the SEC is putting more pressure on the crypto industry, having filed civil lawsuits in June against the two largest cryptocurrency exchanges in existence.
