The Blockchain Association has called for Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC), to recuse himself from regulatory proceedings due to allegations of “clear bias” against the cryptocurrency industry. In a statement written by Senior Counsel Marisa Coppel, it is argued that Gensler’s statements declaring all cryptocurrencies, except Bitcoin, to be securities demonstrate a prejudgment of the facts without a proper assessment of the evidence and data. Coppel goes as far as to claim that Gensler’s objective is to make cryptocurrency illegal in the United States.
Coppel further supports the accusation of bias by highlighting the recent enforcement action taken by the SEC against Coinbase, a well-established crypto company. According to Coppel, the industry has repeatedly requested guidance and clarity from the SEC, but instead of providing the necessary information, the regulator has chosen to engage in an “enforcement overdrive.” This, in Coppel’s view, indicates that the SEC has neglected its role as a rulemaking body, failing to offer the industry the clarity it needs regarding securities laws and their application to different products and services within the sector.
Coppel argues that Gensler’s involvement in the enforcement action against Coinbase constitutes a violation of due process. Central to this alleged violation is the Wells process, which mandates that a company targeted by an enforcement action be informed of the alleged violation and given an opportunity to respond to the accusations. The final decision on whether to pursue enforcement action is made by the SEC Commissioners, and Coppel emphasizes the importance of impartiality in this decision-making process.
However, Coppel claims that Gensler has prematurely categorized all cryptocurrencies, except Bitcoin, as securities, thereby indicating a bias that contradicts the requirement for impartiality when initiating an enforcement action against a company. Consequently, she argues that Gensler cannot maintain a neutral position when voting on whether the regulator should pursue enforcement action, and his participation in the Coinbase case is seen as a violation of due process.
To support her arguments, Coppel cites legal precedents such as American Cyanamid Co. v. FTC and Cinderella Career & Finishing Schs., Inc. v. FTC. These cases established that agency officials must recuse themselves if they have already formed judgments about the facts of a case.
The Blockchain Association is urging SEC Chair Gary Gensler to recuse himself from regulatory proceedings due to allegations of bias and prejudgment. The association’s senior counsel, Marisa Coppel, argues that Gensler’s statements and actions demonstrate a clear bias against the cryptocurrency industry and a failure to provide the necessary clarity and guidance. Coppel further contends that Gensler’s involvement in the enforcement action against Coinbase violates the principles of due process. As the debate surrounding cryptocurrency regulation continues, the impartiality and fairness of regulatory bodies like the SEC remain crucial for the industry’s development and growth.