The United States is set to hold its presidential election in November, which has intensified scrutiny on how the Democratic administration has handled cryptocurrencies over the past four years. President Biden’s additional tax proposals, along with some Democrats labeling cryptocurrencies as the root of all evil, have sparked a significant backlash. Today, SEC Chair Gary Gensler finds himself under immense pressure due to perceived negative treatment of cryptocurrencies.
SEC’s Criticism from Congress
SEC member Hester Peirce made strong statements criticizing Gensler today. Various Congress members are voicing their concerns, and Gensler is understandably sweating, knowing that the upcoming elections will push Republican members to challenge him more fiercely. Although Peirce and fellow member Uyeda have previously critiqued their institution, this is the first time they have so publicly diminished Gensler in Congress.
Representative Tom Emmer targeted Gensler, accusing him of misusing the agency’s enforcement powers. He alleged that Gensler has even baited compliant companies for punitive actions, labeling him as the most destructive and unlawful chair in SEC history.
“The SEC has never had such a destructive and unlawful chair. You invented the term ‘crypto asset security,’ which does not exist anywhere in the regulation. You used this term as the foundation for all your enforcement efforts, but your lawyers had to withdraw it in court.”
Representative Nickel expressed anger towards Gensler for stifling innovation.
“Your attitude towards this technology has set us back years in the Web3 transformation.”
Following the recent loss in the Ripple 
$1 case, the SEC’s narrative regarding cryptocurrency securities has suffered a major blow. Furthermore, 42 Congress members have urged the SEC to permit banks to offer cryptocurrency custody services. BNY Mellon recently gained the SAB121 exemption to facilitate this service.
