SEC Chairman Gary Gensler faces growing criticism of his oversight of the crypto industry amid alleged ties to collapsed exchange FTX and rival firm Binance. Calls for Gensler’s resignation have amplified after recent Congressional testimony raised questions about his impartiality.
Gensler previously applied for a senior role at Binance but was rejected, as reported by crypto commentator @LadyofCrypto1. In early 2022, he held closed-door meetings with FTX and its former CEO Sam Bankman-Fried.
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Ties to FTX Under Scrutiny
Gensler’s links to FTX, which collapsed in an alleged fraud scandal, are under particular scrutiny. A former colleague at the CFTC, Ryne Miller, served as FTX’s general counsel. Another former MIT colleague, Glenn Ellison, is the father of FTX co-founder Caroline Ellison.
With the SEC now investigating FTX, some allege Gensler cannot impartially regulate the crypto space given his proximity to key figures. This perceived cronyism has amplified calls for his resignation.
Struggled to Justify Crypto Authority
In recent Congressional testimony, Gensler struggled to clearly justify the SEC’s authority over cryptocurrencies, dodging questions about the legal meaning of “investment contract,” as noted by a member of the Democratic Party, Rep. Ritchie Torres.
Gensler’s evasive responses have strengthened accusations that he has abused his power and regulatory authority. Congressman Ritchie Torres explicitly called for Gensler’s removal, slamming his “deafening and damning” testimony.
With Gensler’s track record increasingly under fire, his days leading the SEC appear numbered. The Biden administration may need to reset with new crypto leadership untainted by allegations of unfair industry ties.
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