Politics and the SEC
When Securities and Exchange Commission (SEC) lawyers were pressing its case against crypto company DEBT Box late last year, many were surprised when the Agency’s counsel appeared to intentionally try and mislead a Federal court judge and thereby put themselves at risk of sanctions.
Now, Republican Senators Cynthia Lummis (WY), Bill Hagerty (TN), Katie Boyd Britt (AL), Thom Tillis (NC) and JD Vance (OH) want answers from SEC Chair Gary Gensler.
Fortune’s Leo Schwartz reports, “Wednesday’s letter from the Republican senators, led by Vance, reflects the heightened stakes of the otherwise inconsequential lawsuit. The lawmakers are using the episode to advance their complaints about Gensler’s administration, which critics argue is politically motivated, especially with crypto.” Read more.
Letter to SEC Chair Gary Gensler regarding “enforcement proceedings against Digital Licensing Inc., also known as ‘DEBT Box'” – Vance.Senate.gov
what you should know: It’s still possible the Judge in the case could issue sanctions against the agency and its lawyers in spite of the fact the SEC has tried to have the case dismissed while it tries to wiggle out of a mess.
a second term
Pro-crypto advocates have openly fantasized SEC Chair Gary Gensler will decide to leave the agency even if President Joe Biden wins in the general election this year.
Not so fast. In an interview with Politico’s Declan Harty, Gensler says, “I love this job,” and he states that he “absolutely” plans to the end of his term in 2026. Read more.
illicit finance hearing
Next week, House Financial Services (HFS) Digital Assets, Financial Technology and Inclusion Subcommittee are reprising a hearing that first took place in June with “Crypto Crime in Context Part II: Examining Approaches to Combat Illicit Activity”. The hearing takes place on Thursday, February 15 at 2 p.m. ET in Rayburn House Office Building. Hearing page.
The first “Crypto Crime” hearing was in mid-November when Democratic leaders on HFS expressed concerns about crypto and anti-money laundering regulation given the October 7 terrorist attacks by Hamas and a WSJ article which followed. Meanwhile, Republicans were looking for a more nuanced approach (such as sanctions) to address illicit finance and digital assets. Read a bit about that hearing.
American University law professor Hilary Allen, who has appeared as a witness in front of the Congressional ommittees on crypto, burnished her “anti-crypto army” reputation yesterday with a critique of Coinbase’s “State of Crypto” report (PDF).
Allen said on X, “Once again, the crypto industry is correctly diagnosing problems with the financial system BUT completely misrepresenting its ability to solve them. The claims in this report about potential speed/size/disintermediation are completely overstated.”
still more tips
Review: Chris Dixon’s Read Write Own – Molly White
Opinion: Stop Pretending Crypto Regulation is Hard – Ryan Sean Adams, Bankless
Bain Capital Crypto leads $5.2 million seed round for Ethereum-focused DEX aggregator Flood – The Block
Bakkt, once touted as Bitcoin’s ‘savior,’ is running low on cash – Cointelegraph