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The US regulatory apathy towards cryptocurrency has ended, and regulators have decided that the risk profile isn't worth it.

At a recent House Financial Services Committee focusing on oversight of the SEC, the committee had the opportunity to quiz Gary Gensler on his general regulatory stance and how he intends to advance the SEC's mission.

Though most of the GOP complaints focused on how unfair it was that the SEC was passing rules to regulate securities – especially rules that would make coal companies disclose their pollution – they also absolutely found time to criticize Gensler's stance on crypto.

The GOP questioned Gary Gensler and it was a confusing waste of time

In one example, they desperately tried to get Gensler to expose his true beliefs on whether or not ether is a security, and like a well practiced political appointee, Gary was able to fill his time while saying nothing at all.

Well, perhaps he did say slightly more than nothing, pointing out many coins had the classic markers of securities including:

— Entrepreneurs
— Websites
— Twitter
— Lawyers

So, if you don't want to be a security, maybe make sure you have none of those things.

Broadly, Gensler's general stance and demeanor would suggest that he believes that ether WAS a security. However, earlier comments from Commissioner Hinman surrounding its status as "sufficiently decentralized" have made it inconvenient for the SEC to treat it as such.

So, even if in Gary's perfect world he'd hop on a soapbox and declare ether a security and Vitalik Buterin a fugitive of the state, he must instead be content with piecemeal enforcement targeting far more vulnerable targets.

The political will is really a key piece of understanding the current regulatory posture, before the collapses of Terra, 3AC, BlockFi, Celsius, Voyager, and FTX, it was far easier for politicians and regulators to justify a stance of general ambivalence as they waited to see whether crypto would bring value or devastation.

Now, when they stare out from their ivory towers, the destruction of crypto is harder for them to deny, giving them an opportunity to take pot shots in exchange for political position.

Gensler is still insisting that any exchange trading anything that might be a security needs to come in and register as a securities exchange.

Representative Davidson, who previously attempted to overturn the will of the people for the 2020 election, also announced his intention to introduce a bill to fundamentally restructure the SEC, but failed to share a draft or much in the way of details beyond a single tweet.

Maybe he had a draft and then Dominion switched it out from underneath him using a Venezuela-developed draft-switching technology.

Luckily for avid consumers of insipid technology commentary from self-obsessed boomers, this wasn't even the only House Financial Services Committee hearing this week that touched on crypto. The sub-committee on Digital Assets, Financial Technology and Inclusion also held a hearing to discuss what's going to be the best way to regulate stablecoins. This included recirculating a draft of a stablecoin bill developed by Representative McHenry and Representative Waters.

Another stablecoin bill dies unceremoniously at hearing

This bill initially made me optimistic that we were going to see stablecoin regulation thanks to the apparent bipartisan work on this draft. But Representative Waters quickly killed that hope by saying: "It does not represent a final product of any kind. I think we're starting from scratch. Disregard the bill that has been posted altogether."

She continued to suggest that GOP members were already working on a new version, and that Democrat members also intended to draft their own new bill.

With the collapse of the global financial system pending if the US government is unable to figure out a way around the debt ceiling, it seems incredibly unlikely that stablecoin regulations will be one of the priorities of this Congress.

This hearing was a chance for some politicians to make clear how they feel about crypto, with Representative Sherman comparing regulating stablecoins to regulating organ harvesting or drug dealer scales. His implication seems to be that crypto is so wholly unlawful that the idea of regulating any part of it is deeply objectionable to Sherman.

The BitLicense, every cryptocurrency company's favorite licensing regime, was a favorite of many of the lawmakers, and NYDFS Superintendent Adrienne Harris did an exemplary job of defending its specific regulatory regime.

The reserves under the new bill seem at least somewhat inspired by the New York regime, and other states like Illinois have started to take note. Harris also had to use a portion of her time to reiterate to the committee that the shutdown of Signature Bank was not crypto related, it was experiencing a bank run.

New York finance regulator says Operation Choke Point 2.0 is 'ludicrous'

This increasing pressure has reportedly led to Coinbase planning to launch an overseas derivatives exchange as it plans its corporate future after receiving a Wells Notice.

Broadly speaking, a truly new regulatory framework for either stablecoins or cryptocurrencies would require action from a divided Congress which seems unlikely to act. This leaves regulators to interpret their authority.