SEC Chairman Gary Gensler is on the hot seat as the Senate Banking Committee demands answers and clarity on a range of topics including the commission’s ongoing investigations in the crypto space and Gensler’s belief that cryptocurrencies should be regulated under the securities law.
Senate Banking Committee Grills Gensler
Gary Gensler, Chairman of the United States Securities and Exchange Commission (SEC) was cross-examined by the Senate Banking Committee on Tuesday, September 12. The committee probed the SEC boss for clarification on the commission’s complex rules changes and the ability of these new regulations to address future market failures.
Following the hearing, a Journalist at Fox Business, Eleanor Terrett, revealed in an X (formerly Twitter) post a list of key points from the hearing between SEC Chair Gary Gensler and the Senate Banking Committee.
She stated that a variety of topics were discussed in the hearing, with Artificial Intelligence being the primary focus, while cryptocurrency was discussed on a small scale. Nevertheless, Terrett explained that the members of the committee brought to light Gensler’s rule-making pace, and his aggressive pursuit of crypto firms in the industry.
Republican members of the committee mostly questioned Gensler on his activities in the crypto industry. Some members felt he was encouraging a turbulent environment in the crypto space by enacting new rules and regulations at an excessively fast pace. However, other members felt he was not putting enough effort into positioning the crypto industry under the commission’s heel.
Gensler responded by saying that the US SEC was enacting rules and regulations at a determined pace much slower than the committee’s previous Chairs. As an example, Gensler explained that he provided the public with a sufficient timeline of 70 days to make comments on the commission’s most recent securities rule which involved climate change.
When asked about approvals for Grayscale’s spot Bitcoin ETFs, Gensler avoided making any solid statements. However, he emphasized the importance of securities law in regulating digital assets like cryptocurrency and protecting investors in the crypto industry from fraud and risks.
“I think at the heart of our securities laws is protecting investors against fraud. They get to decide. They get to take the risk. I’m not negative or minimalist about crypto. I just think it would be best if it’s inside the investor protection regime that Congress laid out,” Gensler stated in the hearing.
The SEC’s Ongoing Battle With Crypto Industry
The ongoing battle with the US SEC and the crypto industry has been dominating headlines for years now. The regulatory commission has been striving to assert its authority and establish clear rules and guidelines for the rapidly evolving crypto sector.
In its attempt to govern the crypto sector, the US SEC has filed multiple lawsuits against different crypto firms including Ripple, Gemini, and crypto exchanges like Binance and Coinbase.
In light of this, many crypto industry leaders and political leaders supporting the advancement of cryptocurrency argue that the SEC’s classification of cryptocurrencies as securities stifles innovation and imposes unnecessary restrictions on digital assets.