Gary Gensler, the Chair of the United States Securities and Exchange Commission (SEC), seems to be growing tired of constantly fielding questions about cryptocurrency. In a recent interview on CNBC’s Squawk Box, Gensler expressed his frustration, noting that he receives a disproportionate number of inquiries about crypto compared to traditional finance.
Gensler emphasized that cryptocurrency represents only a small fraction of the overall markets that the SEC oversees. He compared the vast $110 trillion capital market to the comparatively modest $2.4 trillion crypto market. According to Gensler, a significant portion of the crypto market fails to comply with U.S. securities laws, making it a breeding ground for scams, frauds, and other issues.
When asked if the media’s obsession with crypto is what drives the SEC’s attention towards it, Gensler swiftly dismissed the notion, stating that it is simply a reflection of where the media’s focus lies. He pointed out that every time he appears on the show, the topic of crypto is consistently brought up.
During the interview, Gensler tactfully avoided answering questions about the SEC’s Wells notice to Robinhood, which alleged that the company’s crypto services violated securities laws. He explained that he cannot speak about any specific company but acknowledged that investors are not receiving the necessary disclosures about crypto. He also highlighted that many tokens in the market are considered securities under U.S. law, as interpreted by the Supreme Court.
In the midst of a legal battle with the SEC, Paul Grewal, Coinbase’s legal chief, confronted Gensler, urging him to stop misleading the market by claiming that tokens are securities. Grewal argued that even the SEC’s own attorneys have admitted in court that tokens are not securities.
Gensler also evaded questions about whether Ether (ETH) is considered a security and if the SEC would approve an exchange-traded fund (ETF) related to Ether. He simply stated that those decisions would be made by the five SEC commissioners at the appropriate time.
Gensler defended himself against allegations made by House Financial Services Chair Patrick McHenry, who accused him of misleading Congress by refusing to answer questions about the SEC’s classification of ETH. Gensler clarified that the SEC does not disclose information about ongoing investigations or express opinions on whether someone is violating the law unless a case is brought against them.
Despite the criticism, Gensler maintained that he accurately informs Congress about the SEC’s actions. He explained that there are many questions that he chooses not to address during interviews or congressional hearings.
In recent years, the SEC has become increasingly active in the crypto space. In 2024 alone, the commission has filed six crypto-related lawsuits, marking a significant increase from previous years. In 2023, the SEC initiated 46 enforcement actions against crypto firms, which was the highest number in a decade and more than double the previous year.
Currently, there are numerous court cases initiated by the SEC that are still ongoing. Many of these cases involve allegations of selling unregistered securities and operating illegally.
The question remains: Does SEC Chair Gary Gensler have the final say when it comes to crypto regulation?