US senator calls on SEC's Gensler to answer for 'regulatory failures'

Republican Senator Tom Emmer has long been a critic of Gary Gensler and the U.S. Securities Exchange Commission’s cryptocurrency oversight strategy.

Minnesota Senator Tom Emmer has slammed U.S. Securities Exchange Commission (SEC) Chairman Gary Gensler for his flawed “crypto information-gathering efforts,” saying that Gensler should appear before Congress to explain the cost of his “regulatory failures.”

Emmer’s comments came in a Dec. 10 tweet to his 67,500 Twitter followers, where he referred to a bipartisan Blockchain Caucus letter that he co-authored to the SEC chairman on March 16.

Emmer said that “we now know Gensler's crypto information-gathering efforts were ineffective,” citing the collapses of the Terra ecosystem and crypto platforms Celsius, Voyager and FTX.

He declined to provide Congress with the information requested in the letter, which would've informed Congress of the apparent inconsistencies in Gensler's approach that caused him to miss Terra/Luna, Celsius, Voyager, and FTX.

— Tom Emmer (@RepTomEmmer) December 9, 2022

“[Gensler] must testify before Congress and answer questions about the cost of his regulatory failures,” the senator added.

He pointed out that Gensler hasn’t appeared before the House Committee on Financial Services since Oct. 5. 2021, leaving crypto media to fill the void for what Emmer described as the SEC’s investigative failures.

Writers of the Blockchain Caucus letter stated the SEC’s efforts in sourcing information from crypto companies were not “targeted, intentional, or clear” but rather “haphazard and unfocused.”

Emmer argued that Gensler’s response — which came two months later — sidestepped several questions enquiring into the methods and processes that the SEC would adopt in providing oversight to the digital asset industry.

“Instead, Gensler decided to explain to Congress the roles of the SEC’s Enforcement and Examination Divisions,” Emmer stated.

Emmer has previously expressed criticism toward the financial watchdog’s crypto oversight strategy.

“Congress shouldn’t have to learn the details about the SEC’s oversight agenda through planted stories in progressive publications,” he stated on Nov. 26.

Related: Republican lawmaker claims SEC chair was coordinating with FTX ‘to obtain regulatory monopoly’

A few days earlier, on Nov. 23, Emmer tweeted that Gensler’s lack of leadership was a contributor to FTX’s catastrophic collapse earlier in the month.

FTX's collapse is not a crypto failure. It's a failure with CeFi, @GaryGensler, and Sam Bankman-Fried. Decentralization is the point. Watch below for more thoughts pic.twitter.com/VYacafc0ZD

— Tom Emmer (@RepTomEmmer) November 22, 2022

Much of Gensler and the SEC’s efforts over the past years were focused on determining if cryptocurrencies fall within the definition of the Howey test and thus are subject to U.S. securities laws, most notably the ongoing Ripple case with its XRP (XRP) token

Emmer has been a proponent of cryptocurrencies as far back as 2020, taking the view that the U.S. government should clear the way to ensure that it doesn’t stifle innovation in the crypto industry.