SEC's Gensler faces criticism from both parties over cryptocurrency regulations

Chairman Gary Gensler of the U.S. Securities and Exchange Commission (SEC) and others attended a hearing of the U.S. House of Representatives Financial Services Committee on the 24th. Some lawmakers said they were concerned about the SEC's cryptocurrency industry.
First, Republican Senator Tom Emmer asked the SEC if it had made mistakes in the DEBT Box scandal, and Gates responded by saying,
Nsler acknowledged that “this case was not handled properly,” in which the SEC improperly issued a preliminary injunction against cryptocurrency startup DEBTbox.
However, it was later found that the SEC made "materially false and misleading" statements in seeking the court order.
Since then, DEBTBOX has seen its tokens plummet by over 56% and loans have been suspended.
The company demanded sanctions against the SEC for damages it suffered, including being unable to pay employees' salaries. The SEC was ultimately ordered to pay the penalty.
Democratic presidential candidate Kamala Hari Su has vowed to create an environment with "consistent and transparent rules" on areas such as AI and digital assets.
Senator Tom Emmer has made comments suggesting that Gensler may not have done a good enough job over the past three years to establish such clear rules.
Democratic Rep. Ritchie Torres also made comments suggesting that the SEC could arbitrarily apply the "securities" rule to various assets.
"From a securities law perspective, buying Yankees tickets to experience a Yankees game is not an option," he said.
"Is there a difference between buying a virtual currency and buying an NFT (non-physical token) that lets you experience an animated web series?" Gensler responded.
In reference to the Howey Test, the criteria for determining whether a security is a security are "what is offered and how it is sold," and "what common business people are buying and selling."
In response, Torres pointed out that the expectation or promise that something will increase in value or be sold at a profit on the secondary market is the issue.
The bundle can be retroactively attributed to almost any collector's item, consumer good, work of art, or musical work.
The SEC has also sent a notice to OpenSea, a major NFT marketplace, that it considers NFTs to be securities.
The Howey test is a test to determine whether a particular transaction conducted in the United States is a securities transaction based on an investment contract.
Although it is not legally binding, the SEC has filed lawsuits against virtual currency stocks and services based on the Howey test. Specifically, the test asks whether the company is "raising capital" or "
This test is used to determine whether the entity is a joint venture, whether the entity expects to make a profit, and whether the profit is due to the efforts of others. Some also say that the Howey test is not suitable for a new asset class such as virtual currency.
While some lawmakers have defended the SEC, criticism of Chairman Gensler has also come from within the SEC. All five SEC commissioners attended the hearing.
Commissioner Hester Peers, a longtime advocate for cryptocurrencies and known as "CryptoMom," said the SEC had neglected its regulatory duties and "failed to provide regulatory clarity."
"The SEC has taken legally vague positions to hide its shortcomings," he said. "Such an approach is ineffective and leaves everyone questioning the scope of the SEC's authority."
Pierce has been mentioned as a possible candidate for SEC chairman if Donald Trump is re-elected as president.