The day before, the US financial regulator once again reminded cryptocurrency enthusiasts. Earlier this week, the US Securities and Exchange Commission filed a lawsuit against cryptocurrency exchange Bittrex. According to the regulator, the trading platform was not properly registered and therefore had no right to operate. Why the SEC did not pay attention to the exchange earlier is unknown.

What the SEC is being criticised for

Earlier this week, Gensler published a post on his Twitter account with interesting content. In it he mentioned that the SEC has conducted over 1,500 enforcement actions and made the markets “more efficient, competitive, transparent and sustainable”. Of course, this is a very ironic statement in light of the Commission’s tough policy on the crypto industry, which is already causing some US companies to move to other jurisdictions.

This detail is also mentioned in the letter. As the authors of the publication point out, cryptocurrencies still do not have a clear path to register within the EU. They are also unable to comply with any regulation of digital assets, as they simply do not exist in a single market control system. The authors of the appeal blame this on Gensler as head of the Commission, who continues to punish such companies, but does not give them the opportunity to comply with adequate regulations – except to leave US territory.

Specifically, Gensler and his agency are accused of forcing the digital asset ecosystem into a regulatory framework that is incompatible and inapplicable to the new asset class. One of the authors of the initiative, represented by Republican Warren Davidson, said he planned to introduce legislation to fire Gensler based on the allegations against him.

This is what eventually happened. At yesterday's hearing, Davidson explicitly announced his proposal to restructure the US Securities and Exchange Commission. He also proposed the removal of Gary Gensler, who was called incompetent several times during the meeting.

According to Decrypt’s sources, Patrick McHenry, chairman of the House Financial Services Committee, also criticised Gensler’s professional performance in a recent interview with CNBC. Here is one of his quotes.

Gary Gensler has resorted to a terrible strategy – the usual mailing of Wells notices. He has not provided any clarity on the regulation of cryptocurrencies so that we can have these innovations here in the United States.

As a reminder, the relevant notice signals the end of an investigation into a particular company and the possible filing of a lawsuit. In particular, at the end of March 2023, it became known that this document was sent to representatives of the cryptocurrency exchange Coinbase. And this is quite strange, because employees of the latter have repeatedly asked the regulator to clarify how it evaluates certain crypto-assets and whether it considers them to be securities.

McHenry referred to the need to come to a consensus on the definition of digital assets. Still, the Securities and Exchange Commission (SEC) refers to many altcoins as unregistered securities, while the Commodity Futures Trading Commission (CFTC) considers them commodities. This was stated by its representatives in a recent lawsuit against Binance.

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During the evening Committee meeting, McHenry also began by criticising Gensler’s policies. The demands on the SEC chairman were the same – developing a clear system for regulating cryptocurrencies, rather than forcing cryptostartups to comply. In addition, McHenry appeared very unhappy that Gensler was still undecided on the status of Etherium. Here’s his rejoinder, cited by Cointelegraph.

Obviously, an asset cannot be a commodity and a security at the same time. I ask you, sitting in your chair now, to make an assessment according to existing laws, is Ether a commodity or a security?

Gensler has not been able to give a clear answer. Which is odd, because the Commission has previously filed dozens of lawsuits against cryptocurrency companies precisely because they are allegedly distributing unregistered securities. However, in public, Gary somehow failed to clearly characterise ETH, although in late February 2023 he didn’t hesitate to call all altcoins securities.

Here is the full recording of the hearing. We recommend you watch it if you can understand English, because a lot of curious topics were touched upon during the hearing.

McHenry also noted that Wells’ earlier notices filed with the Commission clearly identify Etherium as an unregistered security. That said, Gensler himself did not confirm this in his statement to the Committee.

The problems for Gensler did not end there. During the interview, Gary had to admit that he had never owned or used cryptocurrencies. Naturally, this does not go down well with a government employee who has to regulate the digital asset industry across an entire state. On top of that, he has previously lectured on blockchain and crypto at the international business school at the Massachusetts Institute of Technology in Cambridge, which also raises questions about his competence.

In the end, Gensler failed to call Etherium a security, although he was very much asked to do so. Again, most of the SEC’s claims against cryptocurrencies are that they are allegedly distributing unregistered securities. At the hearing, however, Gary was not so bold and categorical.

Incidentally, during the hearing, Gensler was reminded that he has no right to call any assets securities when referring to all US residents. Such remarks were called irresponsible.

The real highlight of the evening was politician Tom Emmer’s speech. He reminded Gensler in a rather harsh manner that it was under his chairmanship of the SEC that the crypto-exchange FTX, with representatives of which Gary himself had met twice, had collapsed. Emmer also stressed that the Commission has not created a single new regulation for cryptocurrencies, and that the regulator’s policy only forces large companies to leave the US.


The displeasure of Congressional representatives is an important sign of the SEC's failure as a regulator of the US economy. The demands of elected politicians could force Gensler to change course on cryptocurrencies, or even lose his position altogether. Obviously, such a scenario would prove positive for the future of digital assets. They would, however, be treated better in such a case for fear of the potential loss of US leadership in the world of finance. In addition, Gary's dismissal would be a lesson for his successor, who should not make the same mistakes.


What do you think about it? Share your opinion in our ex-rich cryptochat. There, we’ll talk about other interesting topics that affect digital asset prices.