Call for Investigation into SEC Chair Over Algorand Actions

Allegations Against SEC Chair

Adam Cochran, a partner at the venture capital firm CEHV, has urged an investigation into Gary Gensler, the Chairman of the US Securities and Exchange Commission (SEC). Cochran's call for scrutiny stems from Gensler's previous public endorsements of the Algorand blockchain, which he referred to as a "multi-use currency."

Concerns Over Algorand Involvement

Cochran questions whether Gensler held or engaged with Algorand, deemed an "unregistered security," using non-public information from Algorand’s founder, Silvio Micali. These concerns arise due to Gensler's past favorable statements about Algorand prior to its ICO in 2019. Cochran emphasizes the need to examine any potential undisclosed interactions between Gensler and Micali.

Criticism of SEC’s Regulatory Approach

Cochran criticizes the SEC's recent actions against Algorand, arguing they disregard the established precedent in the Howey test, which determines what constitutes a security. He claims the SEC's actions violate due process as outlined by the 14th Amendment, which protects against ambiguous laws.

SEC Commissioner’s Opposition

SEC Commissioner Hester Peirce also disagrees with some of the agency’s recent regulatory initiatives. Peirce opposes the SEC’s efforts to broaden the definition of “exchange” to encompass decentralized finance (DeFi) platforms, describing it as an unnecessary and aggressive measure.

Conclusion

The call for an investigation into Gensler highlights ongoing tensions within the SEC regarding its regulatory stance on blockchain technologies. The differing opinions of SEC officials and industry insiders underscore the complexities of regulating emerging digital assets.