SEC Considering New Trading Rules

“Many of these features encourage investors to trade more,” Gensler said. “We need to ensure investors using apps with these types of features continue to be appropriately protected.”

share

key takeaways

  • Gensler says SEC considering new trading rules in response to January’s GameStop short squeeze and Archegos Capital Management’s collapse
  • Gensler said that he hopes to implement new policies, including increased disclosure requirements on short selling and greater transparency for securities lending, which supports short selling

New Securities and Exchange Commissioner Gary Gensler appeared before lawmakers Thursday to testify for the U.S. House Committee on Financial Services’ third hearing on GameStop. 

Gensler revealed that the SEC will be considering new trading rules in response to January’s GamesStop short squeeze and Archegos Capital Management’s collapse. 

GameStop shares skyrocketed in late January after retail investors coordinated buys using Reddit group WallStreetBets and low-cost trading app Robinhood. Shares rose from $4 to $483 in four months in what was referred to as a “pump and dump” scheme. 

The Archegos meltdown came shortly after in March when the family office offloaded billions in block trades through Goldman Sachs Group Inc., Morgan Stanley and Credit Suisse, among others. 

“Whenever there are major market events, it’s a good idea to consider what risks they might have placed on the entire financial system,” Gensler said in his prepared testimony.

The new commissioner began his testimony by addressing the ‘gamification of trading,’ saying that features like leaderboards, rewards, bonuses and competitions that are designed to promote engagement can be harmful. 

“Many of these features encourage investors to trade more,” Gensler said. “We need to ensure investors using apps with these types of features continue to be appropriately protected.”

Gensler said that he hopes to implement new policies, including increased disclosure requirements on short selling and greater transparency for securities lending, which supports short selling. The SEC will also be seeking public input into how trading apps manipulate trading with “gamification” features, per Gensler’s request. 

“Investors do want to bring some consistency and comparability to climate disclosure,” he told lawmakers.

Gensler has faced pressure from Democrats, who want to see tougher Wall Street regulations. 

“It is critical for our cops on the block at the SEC to protect investors and ensure our markets are transparent and fair,” said Maxine Waters, the committee’s Democratic chair.

Tags

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

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

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

Research Report Templates.png

Research

Pipe Network is a decentralized content delivery network (dCDN) that replaces the sparse, capital intensive data center footprint of traditional CDNs with a permissionless mesh of independent node operators. By orchestrating under-utilized resources that already exist at the edge, rather than purchasing or leasing thousands of servers, Pipe slashes capital intensity while letting supply expand autonomously in the places where bandwidth is scarcest and most expensive.

article-image

ETH’s “breakout marks a significant structural shift and clears the path towards…$4,000,” Kraken’s OTC desk noted

article-image

Fiscal dominance isn’t about interest rates and it isn’t about Trump, either

article-image

Firestarter Storage brings decentralized storage and delivery to Solana

article-image

After lengthy closing arguments on Wednesday, the case is now in the hands of 12 jurors

article-image

Analysts cite weak trading volume and regulatory progress as factors

article-image

Builders weigh in on Ethereum’s first decade and the decisions that will define its next one