Molly WhiteApr 18, 2023

Beginning in 10 minutes: a Congressional hearing focused on the SEC, where Chairman Gary Gensler will face scrutiny over the commission's activities involving the crypto industry (among other things).

Livetweet thread :🧵 (I'll use the hashtag #SEChearing for anyone who wants to mute).

Hearing info: https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=408690
Direct YouTube link: https://www.youtube.com/watch?v=DmipafFCli0

Hearing Entitled: Oversight of the Securities and Exchange Commission | Financial Services Committee

Show threadMolly WhiteApr 18, 2023

Chairman McHenry (R-NC) begins, and launches right in on the topic of digital assets. Accuses Gensler of "refus[ing] to provide clarity" on digital assets and how they fall under securities regulations, and "regulating by enforcement".

McHenry also says that Gensler's leadership of the SEC is "driving innovation overseas and endangering American competitiveness".
He accuses Gensler of doing too much regulation, introducing too many rules.

#SEChearing

Show threadAnn LiptonApr 18, 2023
@molly0xfff In one case, chinchillas were found to be a security. The foundational case deemed orange groves to be a security. This is not regulation-by-enforcement; this is a fact specific test that looks to economic reality and not technological mechanics.
Show threadlippard✅Apr 18, 2023
@annmlipton @molly0xfff Orange groves, or leaseback contracts for orange groves?
Show threadAnn Lipton
@lippard @molly0xfff Orange groves. That's Howey.
Apr 18, 2023 at 2:20pmWeb
Show threadlippard✅Apr 18, 2023
@annmlipton @molly0xfff I know it's Howey, but I thought the issue was whether the leaseback agreement constituted an investment contract, and whether the land sales contract, warranty deed, and service contract collectively were an investment contract/security, not the orange groves themselves.
Show threadAnn LiptonApr 18, 2023
@lippard @molly0xfff There was no leaseback. There was a service agreement which was optional and not accepted in 15% of purchases. Point being, since 1946 there's never been a test for a security that depended on technology or clear rules - earlier if you look to the previous state tests. It depends on economic reality.