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During a fiery congressional hearing on September 24, U.S. Congressman Tom Emmer launched sharp criticism at SEC Chair Gary Gensler, accusing him of leading the most “destructive” and “lawless” tenure in the 90-year history of the Securities and Exchange Commission.
Emmer’s remarks came amid growing tensions between the SEC and the crypto industry, as regulatory uncertainty continues to cloud the sector.
Criticism on Crypto Security Issue
At the heart of Emmer’s grievances was Gensler’s creation of the term “crypto asset security,” which Emmer claimed was an invented concept not supported by any legal statute. “You’ve made up the term crypto asset security.
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This term is nowhere to be found in statute,” Emmer argued, further accusing Gensler of never providing clear interpretive guidance on how the term fits within the SEC’s regulatory framework. According to Emmer, this lack of clarity has been the foundation of Gensler’s aggressive enforcement actions against the crypto sector over the past three years.
Notably, SEC lawyers retracted the term “crypto asset security” in a recent court footnote, a move that Emmer highlighted as a sign of inconsistency in the SEC’s approach. He contended that Gensler’s stance has caused the U.S. to fall behind in crypto space, labeling Gensler’s leadership as historically damaging.
Debt Box Case
Emmer also brought up the SEC’s mishandling of the Debt Box case, a lawsuit where the agency accused a crypto startup of a $50 million fraud. The case was dismissed in May, with the court ordering the SEC to pay $1.8 million in legal fees.
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Emmer criticized the SEC’s lawyers for fabricating false claims to bolster Gensler’s anti-crypto agenda, saying the agency’s actions in this case demonstrated a blatant disregard for fairness.
Hester Peirce Also Criticizes
Adding to the criticism was SEC Commissioner Hester Peirce, a known crypto advocate within the agency. Peirce agreed that the SEC’s recent retraction of the term “crypto asset security” should have happened much earlier, noting that it had caused unnecessary confusion in the market.
“We’ve fallen on our duty as a regulator not to be precise,” she admitted, while urging for clearer guidelines from both the SEC and Congress to help define how crypto tokens fit within existing securities laws.
As the debate over how to regulate digital assets grows louder, political figures like Donald Trump are also vowing to fire Gensler if elected in the upcoming presidential race.
