May 22, 2024
Rep. Patrick McHenry seeks SEC cooperation on SBF documents
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Rep. Patrick McHenry Accuses SEC Chair Gary Gensler of Obstruction in FTX CEO Document Dispute

Rep. Patrick McHenry, the chair of the United States House Financial Services Committee, has indicated his potential intent to issue a subpoena to the Securities and Exchange Commission (SEC) in pursuit of documents related to the former FTX CEO, Sam Bankman-Fried (SBF).

During a hearing on September 27th focused on overseeing the commission, McHenry accused SEC Chair Gary Gensler of actively stifling the digital asset ecosystem and being uncooperative with Congress in relation to the connections between the commission, FTX, and SBF. McHenry asserted that the committee had repeatedly requested documents concerning the timing of SBF’s arrest, given his scheduled appearance before Congress. He noted that despite these requests, the committee had not received any non-public documents aside from those obtained through the Freedom of Information Act. McHenry expressed his reluctance to be the first committee chairman to resort to issuing a subpoena to the SEC.

Back in February, under McHenry’s leadership, the committee had initially requested documents from the SEC pertaining to communications between its staff and the Justice Department concerning the charges against Bankman-Fried. McHenry reiterated this request in April and May, alleging that the SEC had only provided publicly available information. While McHenry’s opening statement at the hearing emphasized digital assets and oversight, Maxine Waters, the ranking member, expressed concerns about the potential impact of a U.S. government shutdown on the SEC’s operations. Gensler stated that if an agreement on government spending was not reached by September 30th, approximately 92–93% of SEC staff would face furloughs.

In response to McHenry’s questioning, Gensler affirmed that Bitcoin was not categorized as a security, as it did not meet the Howie test criteria for an investment contract. Gensler’s remarks on Bitcoin appeared consistent with his stance during his tenure as a professor at the Massachusetts Institute of Technology in 2018.

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