In a sign of how seriously this is being taken, the investigation into Biden's appointed head of the SEC comes from a member of his own party, Representative Ritchie Torres (D-NY) is requesting the Government Accountability Office (GAO) to conduct review of the SEC’s actions leading up to FTX’s collapse last month.
The letter largely focuses on SEC chair Gary Gensler for exclusively claiming regulatory powers over crypto exchanges, but failing to properly regulate them...
“If the SEC has the authority Mr. Gensler claims, why did he fail to uncover the largest crypto Ponzi scheme in US history?” Torres wrote. “One cannot have it both ways, asserting authority while avoiding accountability.”
Torres continues to drill into the Chairman "The operating principle of the SEC must be protection for the investing public, rather than publicity for the political appointee in charge" a reminder of Gensler's investigation into Kim Kardashian's tweet promoting a cryptocurrency, concerned that Gensler was preoccupied with inconsequential but high-profile acts while ignoring less glamorous but necessary responsibilities.
The letter goes as far as basically accusing Gensler of causing the SEC to fall apart under his leadership...
One of those demoralized colleagues is SEC Commissioner Hester Peirce, who has remarked in interviews that Gensler's approach to regulation is "not a good way to regulate" and is not surprised to hear that many have "given up on us."
When it comes to crypto, Gensler has consistently avoided explaining the rules or sharing concerns - organizations only discover they violated regulations when enforcement actions are taken against them.
The SEC has the ability to issue a company an 'exceptive order' which basically results from the company's leaders being able to come in and address concerns with SEC officials. If the SEC believes they are operating outside of the rules unintentionally, this exceptive order serves as an agreement that allows the company to fix what is wrong within a limited timeframe, and the SEC agrees to hold off any enforcement actions against them during that timeframe.
Zero exceptive orders have been issued since Gensler took over, which shows how badly he destroyed what should be a healthy relationship between regulators and the companies they regulate.
Legitimate businesses should never fear requesting the SEC review their plans or practices, to verify they are in compliance with all relevant regulations. Under Gensler, companies fear they'll leave the meeting with an enforcement action against them.
SEC agents who previously believed their role involved providing assistance and guidance, backed by the ability to enforce the rules, have quit in record numbers as their job changed to simply 'punishing people'.
Author: Oliver Redding
Seattle Newsdesk /
