VC Demands Investigation into Gensler’s Conflict of Interest with ALGO: Is the SEC Chair Playing Favorites?

Venture Capital Firm Partner Adam Cochran Calls for SEC Investigation into Chairman Gary Gensler's Actions Against Algorand Blockchain

On Monday, Adam Cochran, a partner at the venture capital firm CEHV, called for an investigation into the Chairman of the US Securities and Exchange Commission (SEC), Gary Gensler. Cochran’s call came after criticizing Gensler’s recent action against the Algorand blockchain, in an 18-part thread on Twitter. Cochran first cited Gensler’s 2019 public statements praising the Algorand network, where he referred to the blockchain’s native token, ALGO, as a “multi-use currency.” Cochran wants the SEC boss to be investigated to ensure that at no time did he hold or engage with Algorand, an “unregistered security,” while having non-public information from Algorand‘s founder, Silvio Micali — a close colleague of Gensler.

Cochran stated that Gensler should be probed “that his public statements about how amazing a technology Algorand was prior to its ICO sale in 2019 had no form of consideration.” He added, “If Gensler ever had dinner with or other help from Micali, it must be carefully examined.” Cochran claimed the SEC’s complaint against Algorand and other tokens ignores 75+ years of precedent in the Howey test. He argued that the SEC’s decision to call out Algorand and other coins as securities was an utter violation of due process, quoting the 14th Amendment, which protects citizens from vague laws.

It is worth noting that the SEC Commissioner, Hester Peirce, shares opposing views with the agency’s regulatory actions. While the SEC recently sought to expand the definition of “exchange” to include new forms of DeFi platforms, Peirce described the move as an aggressive attempt “to solve problems that do not exist.”

Cochran’s call for an investigation into Gensler’s alleged conflict of interest with ALGO has sparked interest in the cryptocurrency community. The SEC has been known to take a hard stance on cryptocurrencies, and Cochran’s call for an investigation into the agency’s chairman has raised concerns about the SEC’s impartiality in regulating the crypto industry.

The Algorand blockchain has been in the news recently after the SEC filed a complaint against it and other tokens, alleging that they were securities. The complaint alleged that Algorand had raised $60 million through an initial coin offering (ICO) in 2019, without registering the offering with the SEC. The SEC also alleged that Algorand had made false and misleading statements about its business and operations.

Algorand is a blockchain platform that aims to provide a secure and scalable infrastructure for decentralized applications (dApps) and digital assets. The platform uses a proof-of-stake consensus mechanism, which allows users to participate in the network by staking their ALGO tokens. The Algorand network has gained popularity among developers due to its high transaction throughput and low fees.

The SEC’s complaint against Algorand and other tokens has sparked a debate about the agency’s regulatory approach to cryptocurrencies. Some critics argue that the SEC’s actions are stifling innovation in the crypto industry, while others argue that the agency is simply enforcing existing securities laws.

In recent years, the SEC has taken a more active role in regulating the crypto industry. The agency has filed numerous enforcement actions against ICO issuers and other crypto companies for violating securities laws. The SEC has also issued guidance on the application of securities laws to cryptocurrencies, which has been criticized by some in the crypto industry for being too broad and vague.

The debate over the SEC’s regulatory approach to cryptocurrencies is likely to continue, as the crypto industry continues to grow and evolve. The outcome of Cochran’s call for an investigation into Gensler’s alleged conflict of interest with ALGO remains to be seen, but it is clear that the crypto community is paying close attention to the SEC’s actions.

Martin Reid

Martin Reid

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