Gary Gensler Doesn’t Hold Any Crypto — But Can He, Legally?

“It would be a conflict of interest if Chairman Gensler held any position in digital assets,” former SEC counsel Howard Fischer told Blockworks

article-image

Source: Third Way Think Tank (CC BY-NC-ND 2.0), modified by Blockworks

share

The Securities and Exchange Commission chief Gary Gensler declared at an April 18 hearing that he doesn’t hold any crypto assets, but are lawmakers aware that he might not be able to?

“I don’t own any crypto assets… [but] all of my securities holdings are actually digital because they’re held by a broker-dealer,” he said in response to questions from Wisconsin Rep. Bryan Steil.

Gensler added that he doesn’t think other members of his team or subject-matter experts who advise him hold any either.

“I don’t believe under our ethics rules they do,” he said.

Republican Rep. Bryan Steil of Wisconsin drew a comparison between SEC senior staff owning stock and regulating equity markets, while not owning crypto and attempting to do the same, implying a contradiction.

Richard Hong, partner at law firm Morrison Cohen, said Gensler could not own crypto even if he wanted to.

“The SEC has strict ethics policy on securities trading, and while I’ve never tested this, I seriously doubt that the ethics folks would allow the chair of the agency to own any — maybe except for [ether], which the SEC says is not a security,” Hong, a former federal prosecutor and senior SEC trial lawyer who has litigated several securities violations, told Blockworks.

The presumed status of ether is based on comments by William Hinman, when he was director of the agency’s division of corporation finance and said at a 2018 conference that ether is not a security. 

However, Gensler avoided a question from Congressman Patrick McHenry at the hearing on whether, in his view, ether is a security.

“Ummm, I… I… it’s… actually all securities are commodities under the Commodity and Exchange Act, it’s that we’re excluded commodities, but I would agree that a security cannot also be an excluded commodity and an included commodity, I’m sorry chair, just to talk about the Commodity Exchange Act, more precisely,” he said.

Gensler has previously singled out bitcoin as the only crypto asset that can be deemed as a commodity, saying “everything else other than bitcoin is a security.” This could suggest he believes ether is a security, but he has been careful not to say so explicitly.

Howard Fischer, partner at New York-based law firm Moses Singer, said the SEC strictly limits the kinds of investments allowed to staff.

“Generally speaking, while fewer restrictions apply to index mutual funds or government bonds, there are limits on the amounts of sector holdings and on individual equities, and owning securities of financial services firms is forbidden,” Fischer, an ex-SEC counsel, told Blockworks.

If an SEC official were involved in a case regarding a specific issuer, they could not hold securities of that issuer, according to the former prosecutor.

“The general rule is that if you are regulating or enforcing with respect to an issuer, then it would be a conflict of interest for you to have a position in that security (long or short). I would imagine it would be a conflict of interest if Chairman Gensler held any position in digital assets,” he said.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template.png

Research

The march toward an interoperable and onchain-by-default internet depends on reliable messaging and value transfer across heterogeneous domains. Crosschain protocols now process >$1.3T in combined annual transfer volume and secure tens of millions of user interactions, yet no single design dominates.

article-image

The goal, per Santiago Santos, is to make crypto a relatable piece of tech for people who may not even understand it

article-image

Stripe stablecoin unit aims to operate under a federal charter enabling regulated stablecoin issuance and custody services

by Blockworks /
article-image

Will TradFi make crypto better or create more problems than it solves?

article-image

Subtle decisions by risk curators saved Aave from significant turmoil

article-image

The new Rootstock Institutional unit aims to connect professional investors to Bitcoin-native yield and liquidity strategies anchored in BTC’s security layer

by Blockworks /
article-image

DOJ files record civil forfeiture against more than 127,000 BTC linked to scam activity

by Blockworks /