Bitrabo Editorial
Gary Gensler, the Chair of the US Securities and Exchange Commission (SEC), is currently facing scrutiny from Republican lawmakers due to his perceived critical view of the cryptocurrency sector.
The inquiry, spearheaded by Congress members Jim Jordan, Patrick McHenry, and James Comer, focuses on claims that the SEC may have shown political bias in its hiring processes.
Allegations of SEC Hiring Bias
In a letter sent to Gensler, the lawmakers pointed to a public email exchange within SEC rulemaking comments. This exchange raised concerns that the hiring decisions for Dr. Haoxiang Zhu, who oversees Trading and Markets at the SEC, may have been swayed by his political views.
The email from Dr. Zhu to Gensler dated May 18, 2021, noted his political alignment with the SEC’s goals, saying, “I feel positioned correctly on the political spectrum and can provide details as needed.” Dr. Zhu was appointed to his position six months later in November 2021.
The lawmakers contend this communication suggests that the SEC might be unlawfully factoring in an applicant’s political stance during hiring. They claim that senior positions are being filled by individuals from “left-leaning organizations,” which could compromise the agency’s neutrality.
If the allegations are confirmed, this could breach the Civil Service Reform Act of 1978, which requires federal hiring to be merit-based, free from political bias.
Potential Impact on the Crypto Sector
In light of the investigation, Gensler is required to present documentation and information dating back to April 17, 2021, covering any relevant communications regarding hiring, employment, or termination of directors and associate directors within the SEC.
Lawmakers have also asked for all correspondence relating to the assessment of job applicants’ political beliefs. Gensler must fulfill these requests by September 24.
This probe correlates with wider criticisms of Gensler’s SEC over the past few years, particularly regarding its actions perceived as obstructing the growth of the cryptocurrency market and targeting significant figures in the industry.
Under the Biden administration, the approach to digital assets has been viewed as overly cautious, with pro-crypto lawmakers arguing that a lack of clear regulatory guidance has escalated litigation and enforcement actions against the industry.
Representative McHenry, who champions the crypto sector in Congress and is leading the investigation, has previously issued a variety of statements advocating for improved regulatory clarity and innovation to promote the industry’s expansion.
Image sourced from DALL-E; chart by TradingView.com