Gary Gensler is a master of playing the media. Last October, for instance, the Securities and Exchange Commission chair released a video early one Monday morning announcing the agency had fined Kim Kardashian for her role in promoting an obscure crypto token. Even though the incident dated from June 2021 and was widely viewed as insignificant, the mix of celebrity scandal and the timing of the video let Gensler and the SEC bask in wall-to-wall news coverage.
The crypto industry has long chafed at such antics, arguing Gensler instead should focus on creating a regulatory framework for digital assets. But lately, the industry has become doubly frustrated as Gensler has deployed his media savvy to deflect attention away from crypto-related legislative proposals in Congress—and onto his own agency.
A conspicuous example was in early June, when the House Agriculture Committee held a hearing titled "The Future of Digital Assets" that was intended to identify gaps in the current regulatory scheme. The morning of the hearing, however, the SEC dropped a sweeping complaint against Coinbase—only hours after it sued the industry's biggest exchange, Binance. The result, predictably, was a flurry of attention at the hearing and in the media about the SEC lawsuits—and very little about the alleged regulatory gap.
The timing of the SEC lawsuits could be written off as a coincidence—but for a pattern of the agency making crypto-related announcements to coincide with earlier hearings. As the chart below shows, Fortune has identified at least six examples of this in 2023 alone.
While several examples are lawsuits filed to coincide with scheduled crypto hearings in Congress, the SEC did use other tactics. For example, on two occasions, the agency has released a crypto-focused "Office Hours with Gary Gensler" video on Twitter on the day of legislative hearings.
In interviews with Fortune, crypto industry executives have fumed over these tactics. One executive, who asked not to be identified out of fear of reprisal from Gensler, complained that the SEC chair has sought to counterprogram Congress's agenda with his own, and accused him of seeking to thwart the efforts of elected lawmakers. It's not clear, however, if Gensler's behavior amounts to anything untoward.
Jonathan Adler, a professor at Case Western University who is highly cited for research on administrative law, noted that agency heads like Gensler are political appointees and behave accordingly.
"They often have policy agendas they’re trying to pursue, and that involves making the public case for what the agency is trying to do," Adler told Fortune.
Adler noted that a handful of agency heads—notably the late FTC Chair Michael Pertschuk—over the years have taken public stances that gave rise to questions about their ability to be impartial toward the companies they regulated. But he says that he doesn't believe Gensler's behavior has crossed such a line, even if the crypto industry may resent his attempts to stymie legislative progress.
"It's understandable why folks on the other side [of these tactics] might not appreciate it," said Adler.
