Molly WhiteEmmer: "You say the crypto market is rife with noncompliance, however existing SEC rules make no sense for blockchain-based companies, and following them would actually kill these businesses."
Emmer accuses Gensler and the SEC of "pushing American firms into the hands of the [Chinese Communist Party]".
Emmer entered into the record a WSJ article about crypto going to China. I believe it was this one: https://www.wsj.com/articles/hong-kong-banks-are-netting-crypto-customers-as-citys-push-gains-steam-ccb5811f
Rep. Gottheimer (D-NJ, member of blockchain 8) says he's concerned about the SEC is regulating by enforcement and not through formal guidance. Gensler says they have been issuing guidance.
Rep. Loudermilk (R-GA): "What I see in industry is a decentralization of information because of the risk of disclosure. Blockchain. Many industries are going to blockchain because you're no longer centralizing. When it's centralized, there's a one-stop shop for the bad players to come and get information about individuals."
"Is it easier to protect decentralized investor information held by thousands of firms, or do you feel it's more secure to centralize that in a database administered from Washington, DC?"
🥴
Loudermilk: "Let me tell you, there is no one in the information systems industry that's worth their salt that will tell you that it's more secure to have information at one point, one-stop-shop so if I'm a bad guy, I'm a foreign player, I've only got one spot to go to pull all this information. I'm going to put all my investment, all my technology in breaking your security to get that information." 1/2
"... Versus thousands of places that I do not have the resources to do that. Centralizing is a security risk." 2/2
I have a headache now.
I think he was talking about the Consolidated Audit Trail, but uhh
Rep. Meeks (D-NY) speaks of the NYDFS BitLicense regime for crypto. He asks Gensler for his thoughts on the repeated claims that crypto businesses will just go offshore.
Gensler: "If they're compliant with laws and doing right by investors, they can be here."
Rep. Torres (D-NY, member of the blockchain 8) is trying to draw a distinction between "high-risk... offshore, deregulated, over-leveraged companies ... like FTX" and other parts of the crypto industry.
Torres bashes SEC for what he views as targeting Coinbase not Binance, and Paxos not Tether. Accuses him of not learning from the FTX failure.
Gensler agrees that US investors are accessing crypto markets via on- and off-shore exchanges, and that the SEC has jurisdiction over any company serving US investors.
Gensler on offshore crypto companies: "It takes longer to build the investigative files, sometimes in cooperation with offshore enforcement authorities to pursue that, and it is frankly more challenging to actually get subpoenas complied with and so it takes longer in time."
Rep. Davidson (R-OH, member of the blockchain 8): "Chairman Gensler, in advance of today's hearing, did you coordinate acceptable responses with Senator Elizabeth Warren?"
Gensler: "No, I'm speaking on my own behalf."
Davidson: "Did you coordinate with Democratic staff? And I ask because it's happened before, and I want to be clear whether you operate of your own accord or whether there's some sort of coordinated approach to the damage you're inflicting on America's capital markets."
Gensler: "No, I'm speaking on my own behalf."
Davidson: "Did you coordinate with Democratic staff? And I ask because it's happened before, and I want to be clear whether you operate of your own accord or whether there's some sort of coordinated approach to the damage you're inflicting on America's capital markets."
Davidson is pressing on SEC's claims that EthereumMax is an unregistered security, which he seems to be suggesting is listed on Coinbase (and thus Coinbase is offering unregistered securities). Did Coinbase list EMAX or is he confusing EMAX and Ethereum? :🧐:
Davidson describes SAB 121 as "punitive", asks if Gensler believes it should be amended.
Davidson: "Your record of failures to protect investors and abuses of power make it clear we need to restructure the SEC."
Rep. Rose (R-TN) wants to know how Gensler "went a whole year" without testifying in front of the Committee. Rose asks if the Dems never reached out to him to testify, or if he refused. Gensler says "I stand ready to be here".
Rep. Steil (R-WI) is doing "but his emails" for Gensler. Gensler says he's not used personal emails to conduct SEC business. Steil asks if he has multiple emails, Gensler says he has two, both publicly listed.
Steil asks if Gensler has a crypto wallet, or if he or his staff own crypto. He says ethics rules prohibit it. Steil is suggesting they are "in the business of making rules and regulations" despite never having personally owned crypto. :🙄:
⬣Socrates⬣You cant trust a word of what they are saying anyway.
Maybe they shorted crypto and therefore does not own it but are making money on it.
The point is you never know , they would never tell us.