Video Summary
On April 18, 2023, SEC chief Gary Gensler is set to testify before the House Financial Services Committee in what is expected to be the first of many oversight hearings.
This is not just another one of those hearings where Gensler begs congress for more taxpayer dollars to be used to harass hardworking, law-abiding innovators for having the absolute gall to create products that help more Americans keep pace with rampant inflation.
Nor is it a forum for Gensler to prosecute entrepreneurs for breaking the security laws that only exist in Gensler’s imagination.
This is a hearing where Gensler will face questions regarding his flagrant disregard for law and jurisdictional boundaries as well as for his brazen abuse of enforcement power.
This video is comprised of 20 questions (also listed below) that our elected officials would be remiss if they do not ask Gensler at the upcoming hearing.
20 Questions for Gary Gensler
1. Why are the SEC’s 2023 examination and enforcement budgets more than 6 times the size of its budget for Corporate Finance, more than 9 times the size of its budget for Trading & Markets, and more than 12 times the size of its budget for Investment Management? Why is the SEC allocating drastically more resources to scrutinizing and prosecuting citizens instead of fostering the innovation and capital formation that spark economic growth?
As the above chart illustrates, more than half of the SEC’s $2.17 billion budget goes toward examinations and enforcement activities. This is unacceptable for an agency that is supposed to be facilitating capital formation; maintaining fair, orderly and efficient markets; and protecting investors from fraudsters (not from entrepreneurs who are dutifully navigating an ambiguous regulatory framework).
2. What concerns, if any, had the SEC expressed to Coinbase prior to furnishing the company with a Wells Notice? Is it standard practice for the SEC to pursue an enforcement action in response to a company seeking guidance from the SEC - or does that practice only apply to companies in the cryptocurrency industry?
3. Where is the law that establishes staking as a security?
4. How much money has the SEC spent so far in its enforcement action against Ripple Labs? According to reports, Ripple has spent well over $100 million in pre-trial legal fees, defending against the SEC. Taxpayers deserve to know exactly how much the SEC is spending on this case and why those dollars shouldn’t instead be going to the SEC divisions that facilitate the capital formation necessary to create jobs and foster economic growth.
5. If the SEC loses its case against Ripple Labs, can Mr. Gensler assure the American people that the SEC will not squander more of our taxpayer dollars with an appeal?
6. How many of the SEC’s 4,685 full-time employees have been allocated to the SEC’s enforcement action against Ripple Labs?
7. Has the FedNow product, the US government-based payment system that competes with Ripple, been a factor in the SEC’s decision to pursue Ripple so aggressively?
8. How many times did Mr. Gensler, personally, meet with Sam Bankman-Fried prior to the bankruptcy of FTX? What was discussed? Are there notes of those meetings?
9. Does Mr. Gensler believe that NFTs are securities? If so, what is the specific law that establishes NFTs as securities?
10. If an individual monetizes her personal data via an NFT, would she be subject to an SEC enforcement action?
11. Are reward programs securities? Is the SEC going to start suing every individual who sells their Delta rewards miles?
12. Since Mr. Gensler took over as Chairman of the SEC, how many S-1’s and Form 1-A’s have been filed with the term, “cryptocurrency” in its application? How many of those S-1’s and Form 1-A’s with the term, “cryptocurrency” in its application have been qualified by the SEC? The answer can be found here.
13. During the SEC’s filing review process, what is the average number of staff comments for fintech companies?
14. During the SEC’s filing review process, what is the average number of staff comments for non-fintech companies? Do fintech companies receive more comments, on average, than non-fintech companies? If so, why?
15. During the SEC’s filing review process, what is the average length of time for fintech companies to be qualified?
16. During the SEC’s filing review process, what is the average length of time for non-fintech companies to be qualified? Do fintech companies take longer, on average, to be qualified than non-fintech companies? If so, why?
17. Is there now or has there ever been a moratorium, at the SEC, on qualifying any fintech companies whose products compete with or could potentially compete with legacy financial products?
18. Has anyone, associated with any financial institution, ever requested that the SEC slow-walk or stonewall qualifications for fintech companies, or any type of company, whose products could be viewed as competitive to legacy finance?
19. Has any government official ever requested that the SEC slow-walk or stonewall qualifications for fintech companies, or any type of company, whose products could be viewed as competitive to legacy finance, a Central Bank Digital Currency (CBDC) or the FedNow payment product?
20. If diversity and inclusion are as important to the SEC as it purports, then why is the SEC now seeking to amend the accredited investor definition by increasing the annual income and net worth thresholds which would only result in excluding more minorities?
Those are my 20 questions. Please feel free to add your questions and concerns in the comment section below. It is imperative that we keep America’s capital markets grounded in democracy.
There is a reason why America’s capital markets became the envy of the world. It is because America’s markets emerged from a nation that was rooted in freedom - the freedom to innovate, and the freedom to invest in and profit from the innovations of fellow citizens.
A government that impedes innovation, restricts access to its capital markets under the guise of protection, regulates its competitors, and rules by enforcement is not a democracy. It is an autocracy.
It is not surprising that the entire stock market of autocratic Nicaragua is about the size of just one small cap company in the US.
Don’t let Gary Gensler Nicaragua America’s Capital Markets!
Check out related articles below:
20 Questions that Congress Needs to Ask Gary Gensler at the SEC Oversight Hearing