U.S. House Republicans launched an investigation into Gensler, arguing that the SEC takes political affiliations into account when hiring, which could violate federal law.

In a Sept. 10 letter to Gensler, Republican lawmakers Jim Jordan, Patrick McHenry and James Comer alleged that the SEC had hired people from “left-leaning organizations” for senior positions. Lawmakers noted that this could violate federal law and cast a shadow on the SEC’s impartiality.

In particular, lawmakers singled out an email exchange in which Gensler wrote to Dr. They claimed that the decision to hire Haoxiang Zhu may have been influenced by Zhu’s political views.

In the emails dated May 2021 included in the letter, it was stated that Zhu stated to Gensler that he was “in the right place on the political spectrum” and that he started his duty at the SEC on November 19, 2021, six months after this correspondence.

Lawmakers presented the correspondence as evidence that the SEC illegally considered candidates’ political ideologies during the hiring process.

The letter argued that, if these allegations were true, the SEC was recruiting individuals with a particular ideology in violation of federal law, undermining the SEC’s claimed impartiality.

If these allegations are true, it was stated that the SEC violated the Civil Service Reform Act and jeopardized impartiality by employing employees with a certain ideology within the institution.

Lawmakers requested all documents and correspondence from Gensler regarding the SEC’s hiring and personnel decisions made starting April 17, 2021. In particular, documents are requested regarding the decisions taken regarding the director, deputy director and positions in Gensler’s team.

It also asked for any information about how the SEC evaluates candidates’ political affiliations or ideologies during the hiring process.

Gensler must submit this information to the House Judiciary Committee by 5 p.m. on September 24. This committee is chaired by Republican congressman Jim Jordan.

Gary Gensler’s SEC chairmanship is notable for its increased enforcement actions, especially against cryptocurrency companies. The year 2023 saw the highest level of the last 10 years with 46 sanctions decisions against cryptocurrency companies. This number was twice the number of sanctions in 2021, and the SEC’s strict supervision of crypto markets increased significantly during this period.

Meanwhile, former US president and Republican presidential candidate Donald Trump has promised to remove Gary Gensler from the SEC on his first day in office if he wins the presidential elections in November 2024.

This tension between Trump and Gensler has become symbolic for many Republicans who have criticized Gensler’s tough stance on cryptocurrency markets.

Gensler was nominated to chair the SEC by President Joe Biden. SEC chairmen typically resign when there is a party change in the White House, so whether Gensler remains in office may depend on upcoming election results.