SEC boss Gary Gensler defends his stance on the regulation of cryptocurrencies before the US Senate

SEC boss Gary Gensler defends his stance on the regulation of cryptocurrencies before the US Senate

This is how Gary Gensler defends his stance before the US Senate

Securities and Exchange Commission Chairman Gary Gensler addressed an economic committee yesterday to discuss the SEC's funding for the coming fiscal year. He couldn't avoid questions about his crypto policy and defended his stance.

Gensler has been in the headlines in recent months due to his hostility towards cryptocurrencies. Now he has explained to the US Senate why he takes this stance.

At a conference in the US Parliament, Gensler explained his plans for the 2024 financial year and asked for financing for new employees. He emphasized that the SEC can finance itself through fees collected for violations of the law.

Chris Van Hollen, the chairman of the economic committee, also asked Gensler about his policy positions on Bitcoin and other cryptocurrencies. Gensler then explained that the crypto industry has so far behaved like the Wild West and is completely lawless.

He argued that private investors in the US and around the world are suffering immense damage that could be prevented through appropriate regulation. Gensler referred to the Securities Act and explained that projects in which the public expects to make profits based on the performance of specific individuals fall under this law.

However, Gensler was unable to provide an exact number of how many cryptocurrencies fall under this category. However, he emphasized that there are “many”.

Gensler also pointed out that the crypto industry is evolving so quickly that legislation cannot keep up. This constantly creates new loopholes that can be exploited by people with negative intentions.

He also criticized the fact that many crypto firms officially perform different functions, which leads to conflicts of interest. As an example, he cited the case of the crypto exchange FTX, where customers' investments are held in custody while at the same time trading is carried out against these people.

Gensler emphasized that the SEC has a duty to oversee the crypto industry because its sister agency, the CFTC, does not have the necessary legal authority. In doing so, he defended his politics against accusations that he was abusing his office for his own political ideas.

He also explained that he is convinced of blockchain technology, but that it has so far been difficult to use in practice due to a lack of transparency. He also wants to change this situation.

Finally, Gensler admitted that there are cryptocurrencies that are not subject to SEC supervision. However, he did not give any specific examples, but in the past he has mentioned Bitcoin and Ethereum as examples.

When asked why the SEC has not taken action against FTX, Gensler replied that he could not comment on this specific case. However, he emphasized that the crypto industry generally operates in ways that would not normally be accepted by the SEC.