Security or commodity? A question Gensler failed to answer in the Congressional showdown.
Crypto's great villain, Gary Gensler, finally made crypto fans happy. Not because he finally did something good for crypto. But because he got his backside handed to him in a congressional hearing:
There is quite a bit to unpack here, so let's cover:
- What this hearing was about
- What Gary Gensler got grilled on
- What this means for crypto
What Was the Congressional Hearing About?
Congressional hearings collect and analyze information ahead of policy-making. With a couple of crypto bills stranded in the wheels of Washington's legislative process, the hearing on Tuesday was to provide some clarity for things to move forward.
With the stage set for the hearing, you will not believe what happened next...
What Gary Gensler Got Grilled on?
If you haven't watched the clip above, here it is one more time, just because it was so beautiful. McHenry put Gensler on the spot about the "security or not?" question:
The clip went viral on Crypto Twitter, not least because Gensler was visibly shaking when he tried to weasel out of answering the question with a simple yes or no. But it was not the only time Gensler was made to look uncomfortable.
Want another example of Gensler looking like a poorly-prepared pupil that's been summoned to the board?
Here's one. Congressman Warren Davidson tried to elicit from Chairman Gensler whether ETH is a security by quizzing him about Ethereum Max:
Don't worry, there's more. Tom Emmer from the Congressional Blockchain Caucus gave Gensler the Congress equivalent of a hairdryer treatment in a five-minute dressing-down, covering everything from lack of regulatory clarity over bad enforcement to pushing the industry into China's hands. This one is well worth watching in full:
So what would be the appropriate course of action here? Congressman Davidson thinks it's time for Gensler to find a new job:
This is just a best-of-dunking-on-Gensler video compilation. But as fun as that is to watch, what actionable steps are next for the crypto industry?
What Does This Mean for Crypto?
Crypto Twitter was obviously stoked by Gensler's poor showing at the hearing. Erik Voorhees had a PG-take on the entire situation:
Congressman McHenry reiterated what he said in the hearing. Gensler is doing nothing right and is driving the industry against a wall:
But it's become painfully obvious to everyone on Crypto Twitter and beyond that Gensler can't or doesn't want to do a proper job of giving crypto regulatory guardrails:
So where does crypto go from here?
Gensler has the backing of crypto's second main anti-character, Elizabeth Warren. Small wonder that his pre-prepared answers did not pass the stress test of congressional Republicans:
But until that could even happen, there's a good 18 months or so to go. Many more exchanges and other builders will have to deal with the unclear regulatory situation in the US and decide that it's not worth the pain. Less clarity and transparency lead to less innovation, less protection of retail against scams, and more talent leaving.
As fun as the hearing may have been, there are few reasons to laugh for the crypto industry at the moment.