Rep. Patrick McHenry, Chair of the United States House Financial Services Committee, has indicated that he may pursue a subpoena against the Securities and Exchange Commission (SEC) to obtain documents concerning former FTX CEO Sam Bankman-Fried (SBF).
McHenry’s comments came during a September 27 hearing focused on oversight of the SEC, where he raised concerns about the SEC’s transparency regarding its connections with FTX and SBF.
McHenry’s Allegations Against Gary Gensler
In the hearing, McHenry accused SEC Chair Gary Gensler of attempting to stifle the digital asset ecosystem and failing to provide transparency to Congress regarding the relationship between the commission, FTX, and SBF.
Further, McHenry revealed that the committee had made multiple requests for documents related to the timing of SBF’s arrest, particularly given a previously scheduled appearance before Congress.
Frustration Over Document Requests
McHenry expressed frustration, stating that despite seven months having passed since their initial requests, the committee had not received any non-public documents apart from those obtained through Freedom of Information Act (FOIA) requests.
Additionally, he emphasized that their patience was wearing thin and expressed his reluctance to be the first committee chairman to issue a subpoena to the SEC.
Committee’s Previous Requests
The committee, under McHenry’s leadership, had originally requested documents in February related to communications between SEC staff and the Justice Department regarding the charges against Bankman-Fried. McHenry reiterated this request in April and May as he claimed that the SEC had only provided information already available to the public.
While McHenry primarily focused on digital assets and oversight in his opening statement during the hearing, ranking Member Maxine Waters expressed concerns about the potential impact of a U.S. government shutdown on the SEC’s operations.
Moreover, Gensler noted that if lawmakers failed to reach an agreement on government spending by September 30, approximately 92-93% of SEC staff would be furloughed.
Gary Gensler Position on Bitcoin
During the hearing, Gensler stated Bitcoin was “not a security” because it didn’t meet the criteria of the Howey test, which also determines what qualifies as an investment contract. This position aligns with Gensler’s previous statements on Bitcoin when he was a professor at the Massachusetts Institute of Technology in 2018.
In summary, Rep. McHenry’s consideration of subpoenaing the SEC underscores the ongoing concerns about transparency and communication regarding the SEC’s interactions with FTX and SBF. The hearing also touched on the potential impact of a government shutdown on the SEC’s operations and clarified Gensler’s stance on Bitcoin.