Gary Gensler, the chair of the Securities and Exchange Commission (SEC), is facing scrutiny over his hiring practices at the agency. Republican lawmakers have initiated an investigation into the recruitment decisions made during Gensler’s tenure, alleging that political biases have influenced these choices.
In a letter signed by Representatives Patrick McHenry, James Comer, and Jim Jordan, it was revealed that the Committees on Judiciary, Financial Services, and Oversight and Accountability have launched this inquiry in accordance with the Civil Service Reform Act of 1978. The lawmakers have requested access to documents regarding the SEC’s considerations of applicants, as well as information on hiring, terminations, and staff transfers. The SEC has been given a deadline of 5 p.m. ET on September 24 to provide the requested materials.
This development adds to the challenges Gensler faces in his role as SEC chair. Stakeholders within the digital asset sector, along with pro-crypto legislators, have criticized Gensler for his ambiguous regulatory practices. Many in the web3 community assert that the SEC has adopted a predominantly enforcement-oriented approach to regulation, with some even questioning the agency’s constitutional authority to regulate cryptocurrencies. Eric Turner, who succeeded Ryan Selkis at Messari, publicly condemned the SEC for its $1.5 million settlement with eToro.
Cryptocurrency regulations have become a significant point of discussion in Washington and across U.S. jurisdictions. A bipartisan proposal known as the Financial Innovation and Technology for the 21st Century Act has successfully passed through the House of Representatives, despite facing opposition from the White House. If the U.S. Senate approves the bill, the Commodity Futures Trading Commission (CFTC) would take on a substantial role in overseeing cryptocurrencies, placing digital asset exchanges such as Binance and Coinbase under its jurisdiction.
For further details, see: McHenry advocates for Senate approval of the FIT21 crypto bill.