Blockchain Association says legally, Gensler has to step back

The Blockchain Association says that according to federal law, SEC Chair Gary Gensler has to step back from digital assets.

In an open letter published Thursday, the crypto advocacy firm claims that Gensler is stepping outside his congressionally-granted bounds.

The SEC has failed under Gensler’s leadership, the Blockchain Association says, by refusing to create rules and guidance that “allow investors, entrepreneurs, and the public to know whether the securities laws apply to their products or services.”

Gensler has displayed clear bias against the crypto space, the letter added, and he therefore should not be allowed to be involved in enforcement actions against the space.

“During his tenure at the SEC, Chair Gensler has repeatedly and forcefully communicated that he has already prejudged each and every case that may come before him, asserting that all digital assets except for bitcoin are securities,” the letter reads. “Chair Gensler’s vote is tainted: his refusal to engage with the facts and circumstances of each case undermines the Wells process and deprives enforcement targets of the due process rights to which they are entitled.”

It’s not the first time a crypto industry player has requested Gensler take a step back. In March, Ripple and LBRY, two token issuers who have gone head-to-head with the SEC over crypto’s classification, said Gensler’s public comments should disqualify him from participating in future legal proceedings.

LBRY and Ripple were specifically referring to a New York Magazine interview that landed the SEC head in hot water earlier this year. In his comments, Gensler said that “everything other than bitcoin” is a security.

It appears that Gensler’s mind is already made up on the status of crypto, Ripple Chief Legal Officer Stuart Alderoty said, meaning the SEC chair’s personal opinions could “impermissibly taint” future legal proceedings.

“It’s clear that the digital assets industry cannot expect a fair assessment from Chair Gensler,” Jake Chervinsky, Blockchain Association chief policy officer, said in a statement Thursday.

“The time has come for Chair Gensler to recuse himself from all decisions related to digital asset-related enforcement matters. If he refuses, then I expect enforcement targets will begin raising the matter of his recusal in SEC proceedings and in federal district courts.”