Gary Gensler, the Chair of the United States Securities and Exchange Commission (SEC), is becoming increasingly frustrated with the overwhelming number of questions he receives about crypto. In a recent interview on CNBC’s Squawk Box, Gensler emphasized that crypto is just a small part of the overall markets that the SEC oversees. He compared the $110 trillion capital market to the $2.4 trillion crypto market, noting that much of the latter does not comply with U.S. securities laws and is associated with scams and frauds.
When asked if the media’s focus on crypto is influencing the SEC’s attention, Gensler dismissed the notion, stating that it is simply a reflection of where people’s attention is directed. He pointed out that in his numerous appearances on the show, crypto is always a topic of discussion.
Gensler skillfully avoided addressing specific questions about the SEC’s Wells notice to Robinhood, which alleged securities law violations related to its crypto listing and custody services. He explained that he cannot comment on any particular company. However, he stressed that investors are not receiving the necessary disclosures about crypto and pointed out that many tokens are considered securities under U.S. law.
Paul Grewal, Coinbase’s legal chief, who is currently engaged in a legal battle with the SEC, challenged Gensler’s statements, insisting that tokens are not securities. Grewal referred to court proceedings where the SEC’s own attorneys admitted this fact.
Gensler also sidestepped questions about whether Ether (ETH) is considered a security or if the SEC would approve an ETF related to Ether. He simply stated that such matters would be addressed by the five SEC commissioners at the appropriate time.
Furthermore, Gensler defended himself against allegations from Patrick McHenry, the Chair of the House Financial Services Committee, who accused him of misleading Congress regarding the SEC’s classification of ETH. Gensler emphasized that the SEC does not disclose information about ongoing investigations or its opinion on whether someone is following the law unless a case is brought forward.
Despite criticism, Gensler maintained that he accurately informs Congress about the SEC’s actions and decisions. He acknowledged that there are many questions he cannot answer during live interviews or congressional hearings.
The SEC has been actively pursuing legal action against crypto-related cases, filing six lawsuits in 2024 alone. In 2023, it initiated 46 enforcement actions against crypto firms, marking a 10-year high and more than double the number in 2021.
With numerous court cases still pending, the SEC’s approach to regulating crypto remains a contentious issue, and Gensler’s role in shaping this regulation is subject to scrutiny.