1. Hearing on Politicization of Crypto Regulation
2. Witnesses and Statements
3. Reactions and Prospects

On September 18, a US House subcommittee will hold a hearing where former SEC officials will discuss the politicization of crypto regulation.

Hearing on Politicization of Crypto Regulation

According to a September 13 notice from the Subcommittee on Digital Assets, Financial Technology and Inclusion, a hearing titled "Dazed and Confused: Breaking Down the SEC’s Politicized Approach to Digital Assets" will be held on September 18. The witnesses will include former SEC Commissioner Dan Gallagher and Michael Liftik, who served as an attorney, senior advisor, or acting enforcement chief during his roughly ten years at the commission.

Witnesses and Statements

The subcommittee leadership claimed that SEC Chair Gary Gensler had "prioritized and pursued an enforcement and regulatory agenda to the detriment of the digital asset ecosystem" during his time at the commission. They cited inconsistencies with Gensler’s position on digital assets as securities under the Howey test and disagreements among commissioners. Bitwise President Teddy Fusaro, Duke University lecturing fellow Lee Reiners, and Jennifer Schulp, the director of financial regulation studies at the Center for Monetary and Financial Alternatives, will also testify at the hearing. In her written testimony, Schulp argued that the SEC’s approach under Gensler "effectively amounts to a ban on crypto activity within the United States."

Reactions and Prospects

The hearing announcement followed a letter by House Republicans alleging that the SEC was hiring staff based on political affiliation. US President Joe Biden, a Democrat, nominated Gensler as head of the agency after taking office in 2021. During Gensler’s more than three years leading the commission, the SEC has taken several enforcement actions against crypto firms allegedly offering or selling tokens as unregistered securities.

Many are calling on the next US president to ask Gensler to resign once they take office in January 2025. Republican Donald Trump said he intended to fire Gensler "on day one" if reelected, while many Democratic donors are pushing for Kamala Harris to do the same.