Gary Gensler defended his stance before the US Senate
Gary Gensler addressed an economics committee yesterday to discuss the SEC’s funding for the upcoming fiscal year. The SEC boss could not avoid questions about his crypto policy. This is how he defended his stance.
Here’s how Gary Gensler defended his stance before the US Senate
Gary Gensler is the Chairman of the US Securities and Exchange Commission. In this role, the Democratic Party politician has made headlines over the past few months, particularly for his hostile stance on cryptocurrencies. Now Gensler is defending his stance before the US Senate.
The background to his statements is a conference in the US Parliament in which Gensler explains his plans for the 2024 financial year. The head of the authority asks there for the financing of new employees. The SEC can finance itself through fees that are required in the course of violations of the law.
The chairman of the Economic Committee, Chris Van Hollen, also asked Gensler about his political positions towards Bitcoin and Co. The SEC boss then explained that the crypto industry has been behaving like in the Wild West so far – completely lawless.
According to his findings, private investors in the USA and around the world are therefore suffering immense damage, which he is trying to prevent through appropriate regulation.
The public of the world has built up an interest in cryptocurrencies. Generally speaking, behind these projects there is a group of entrepreneurs. In the US, the laws are clear – if the public expects profits based on the performance of specific individuals, then it falls under the Securities Act.
How many of the cryptos fall into this category, Gensler can not say in the form of an exact number, but proportionately “many”.
Gary Gensler: Crypto industry is evolving too fast for legislation
Gensler also points out that the crypto industry is evolving so fast that legislation can’t keep up. New gaps are constantly emerging that offer people with negative intentions the freedom to cause damage and personally benefit from it.
Gensler has also experienced that many crypto companies officially hold different functions, which ultimately creates conflicts of interest in those operations. For example, as crypto lenders, they keep their customers’ investments safe, but trade them on the market against the same groups of people – a description reminiscent of the case of the crypto exchange FTX.
The SEC has a duty to oversee crypto
According to the SEC chief, his agency has a duty to oversee the crypto industry because its sister agency, the CFTC, does not have the necessary legal powers to do so. Gensler is defending his policies in this way after being repeatedly accused by legal professionals, politicians and the crypto industry of abusing his position on the Securities Exchange Commission for his own political ideas.
The 65-year-old also states that he is convinced of blockchain technology. Accordingly, this has some useful advantages for the USA, which cannot be used in practice, however, since there has not been enough transparency so far. He also wants to change this situation.
Gensler also admits that there are cryptos that, due to their properties, are not subject to SEC supervision. He did not want to give specific examples. In the past he cited Bitcoin and Ethereum as examples .
Why didn’t the SEC do anything about FTX?
Since the collapse of FTX in November 2022, large parts of the crypto scene have been asking why the SEC has not done anything about FTX. Many people assume intrigues. A senator used yesterday’s conference to ask Gensler personally.
He then explained that he could not make any statements about the specific case. In general, however, the crypto industry operates in ways that the SEC would normally never accept.