Gary Gensler, the head of the United States Securities and Exchange Commission (SEC), seems to be growing tired of fielding questions about cryptocurrency. In a recent interview on CNBC’s Squawk Box, he acknowledged that he receives an overwhelming number of inquiries about crypto compared to traditional finance. However, he emphasized that crypto is just a small part of the overall markets that the SEC oversees.
Gensler drew a comparison between the $110 trillion capital market and the $2.4 trillion crypto market, pointing out that much of the latter fails to comply with U.S. securities laws, leading to an abundance of scams and frauds. When asked if the media’s focus on crypto reflects the SEC’s priorities, Gensler dismissed the notion, stating that it’s simply a reflection of where the attention lies.
During the interview, Gensler declined to comment on specific cases, such as the SEC’s Wells notice to Robinhood regarding alleged violations of securities laws in its crypto listing and custody services. Instead, he highlighted the lack of required disclosures for crypto investors and stressed that many tokens are considered securities according to U.S. Supreme Court interpretations.
Paul Grewal, Coinbase’s legal chief, who is currently in a legal battle with the SEC, challenged Gensler’s stance, claiming that tokens are not securities and that the SEC’s own attorneys have admitted this in court. Gensler avoided directly addressing whether Ether (ETH) is a security or if the SEC would approve an ETF related to Ether, stating that such filings would be considered by the five SEC commissioners at the appropriate time.
Gensler also defended himself against allegations by House Financial Services Chair Patrick McHenry that he had misled Congress by refusing to answer questions about the SEC’s classification of ETH. Gensler clarified that the SEC does not disclose ongoing investigations or its opinions on whether someone is following the law unless a case is brought forward.
Despite criticisms, Gensler maintained that he accurately informs Congress about the SEC’s actions. He explained that there are many questions that he cannot answer during live interviews or congressional hearings. The SEC has filed six crypto-related lawsuits this year and brought 46 enforcement actions against crypto firms in 2020, which was a 10-year high and more than double the number from 2019.
With numerous court cases still pending, the SEC continues to take action against individuals and companies involved in the sale of unregistered securities and illegal operations. As the debate over crypto regulation rages on, Gary Gensler’s role as SEC Chair raises questions about who has the final say in shaping the future of cryptocurrency regulation.