Senate probes Gensler’s intensive regulatory focus on cryptocurrencies

Senators mostly focused their questions on the SEC’s approach to regulating publicly-registered companies and his so-called aggressive approach to rulemaking during Tuesday’s hearing

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SEC Chair Gary Gensler | Screenshot from US Senate

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During testimony before the Senate Banking Committee Tuesday, US Securities and Exchange Commission Chair Gary Gensler defended his agency’s agenda, which has included issuing more than 24 crypto-related enforcement actions against businesses and individuals in the blockchain space. 

“Given this industry’s wide-ranging noncompliance with the securities laws, it’s not surprising that we’ve seen many problems in these markets,” Gensler said Tuesday in his prepared remarks. “Thus, we have brought a number of enforcement actions — some settled, and some in litigation — to hold wrongdoers accountable and promote investor protection.” 

Senators mostly questioned Gensler on the SEC‘s approach to regulating publicly-registered companies and his so-called aggressive approach to rulemaking.  

“The vast majority of the agency’s rulemaking agenda has been a voluntary undertaking. Chair Gensler you are not an elected official that is beholden to your constituents, you are an unelected bureaucrat that has taken it upon himself to reshape American financial markets,” Sen. Steve Daines, R-Mont., said. 

“We do all that we do based on Congress’ authority,” Gensler responded. 

Sen. Bill Hagerty, R-Tenn., asked what the SEC would need to see in order to approve a spot bitcoin ETF, an issue the industry has become increasingly frustrated with. 

“We’re still reviewing that decision,” Gensler said about a federal court granting Grayscale’s petition for review of the SEC’s denial of its bitcoin ETF. “I’m looking forward to staff recommendations.” 

Asset manager Franklin Templeton filed for a spot bitcoin ETF ahead of Tuesday’s hearing, making it the fifth traditional finance manager to enter the race. 

Gensler noted that the agency needs more funding and staff in order to effectively regulate securities markets and protect investors, a point of contention Commodity Futures Trading Commission Rostin Behnam has also brought up with Congress

Without more funding, “we would not be able to appropriately and impactfully implement the [legislation],” Behnam told the House in June.


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