Gary Gensler's Crypto Game: Stealing the Spotlight from Congress to Illuminate the SEC's Path
The SEC chairman attempts to disrupt the normal agenda of Congress with his actions and accuses him of trying to obstruct the efforts of the legislative body. However, there is currently no clear evidence or regulation to determine whether Gensler's actions are inappropriate.Original Title: Gary Gensler's crypto playbook: Steal the spotlight from Congress, and shine it on the SEC
Author: John Roberts, Fortune Crypto
Translation: bayemon.eth, ChainCatcher
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Due to the unique separation of powers in the United States, the current awkward situation regarding crypto regulation stems from the lack of a unified cognitive framework among various regulatory agencies. For years, institutions such as the SEC, CFTC, and the U.S. Congress have been vying for jurisdiction over crypto, which has led to legislative delays and further resulted in unclear and unenforceable crypto policies. Currently, there is a subtle situation in the U.S. where the CFTC, having regulatory authority only over the derivatives market, has limited power in the spot market and cannot directly compete with the SEC, while dissatisfaction and complaints about the SEC are growing stronger from all sides. Public opinion and various forces are calling for timely intervention from Congress to ultimately resolve the issue through legislation.
As a result, we have recently seen two members of Congress submit a bill to impeach SEC Chairman Gary Gensler, and domestic crypto institutions like Coinbase publicly calling for clear regulation that can only be achieved through Congress or case law. However, some lawyers have analyzed that even if people hope for the government to quickly establish regulatory laws, this process may take longer than the SEC taking more definitive action.
Fortune published an article today about how SEC Chairman Gensler manipulates the media to cover up Congress's actions in the crypto space and outlines the timeline. The article is quite interesting, and we may glean some insights into the regulatory direction in the U.S.
Gary Gensler is a master of media manipulation. Last October, on a Monday morning, the SEC Chairman released a video announcing that the SEC would fine Kim Kardashian for promoting a certain cryptocurrency, which had a subtle impact. Although this seemingly trivial event occurred in June 2021, the combination of celebrity scandal and timing nearly drowned Gensler and the SEC in a flood of news coverage.
The cryptocurrency industry has long been dissatisfied with such "tricks," believing that Gensler should focus on creating a regulatory framework for digital assets. However, recently, because Gensler has shifted attention away from congressional cryptocurrency legislative proposals through his influence in media matters, the spotlight has instead focused on the SEC itself.
In early June, the House Agriculture Committee held a hearing titled "The Future of Digital Assets," aimed at identifying the gap between current regulatory schemes and actual conditions. However, on the morning of the hearing, the SEC suddenly launched a lawsuit against Coinbase, just hours after the agency had sued the industry's largest exchange, Binance. The outcome was inevitable, as both the hearing and the media reported on the SEC's lawsuit, and the so-called improvement of regulatory schemes was long forgotten.
The timing of the SEC's lawsuit may be a coincidence, but it aligns with the agency's pattern of releasing announcements related to cryptocurrencies during previous hearings. As shown in the image below, Fortune magazine identified six such instances in 2023 alone.
Note: The image has been compiled by ChainCatcher.
Despite several lawsuits coinciding with hearing events being SEC "coincidences," it is clear that the SEC has other means to keep itself firmly in the spotlight. For instance, the SEC has twice released videos titled "Office Hours with Gary Gensler" focused on cryptocurrencies on the same day as legislative hearings.
In an interview with Fortune magazine, executives from the cryptocurrency industry expressed their outrage at these strategies. One executive, who wished to remain anonymous to avoid retaliation from Gensler, complained to Fortune that the SEC Chairman is attempting to disrupt the normal agenda of Congress through his actions and accused him of trying to obstruct the legislative body's efforts. However, there is currently no clear evidence or regulations to determine whether Gensler's actions are inappropriate.
Jonathan Adler, a professor at Case Western Reserve University and an expert in administrative law, pointed out that agency heads like Gensler are politically appointed, and their actions align with that identity.
Adler believes that agency heads like Gensler typically have their own policy agendas to promote, and these agendas mainly involve explaining to the public the goals the agency wants to achieve and the efforts made toward that end. Over the years, only a few agency heads, particularly the late Federal Trade Commission (FTC) Chairman Michael Pertschuk, have been able to publicly respond to public concerns about their regulatory fairness. However, Adler stated that while the cryptocurrency industry may be dissatisfied with Gensler's attempts to hinder legislative progress, Gensler's actions have not crossed the line.
