- Gary Gensler testified before the Senate Banking, Housing, and Urban Affairs Committee regarding the agency’s oversight during a congressional hearing.
- Gensler stated that the agency is still not adequately staffed. United States Senator Catherine Cortez Masto had inquired if the agency had a shortage of staff, especially on the enforcement side.
- The SEC had a favorable outcome for Ripple in the Summary Judgment of the XRP case, and in the Grayscale vs. SEC case, the judge approved the company’s Grayscale Bitcoin Trust’s conversion into a spot Bitcoin ETF.
The anticipated day has arrived; SEC Chairman Gary Gensler is testifying before the Senate; what did he say about spot Bitcoin ETFs and the Grayscale case?
SEC Chairman Gary Gensler Testifies Before the Senate
Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), testified before the Senate Banking, Housing, and Urban Affairs Committee regarding the agency’s oversight during a congressional hearing. Gensler stated that there is a serious lack of alignment in the cryptocurrency sector and that the industry is rife with fraud, abuse, and misconduct.
In response to a question about having enough personnel to enforce regulations on the crypto ecosystem, Gensler mentioned that the agency is still not adequately staffed. United States Senator Catherine Cortez Masto had asked if the agency had a shortage of staff, especially on the enforcement side. Gensler noted that in terms of staffing, the agency has only 3% more personnel than it did seven years ago.
“Today’s markets are 50-60% larger in terms of activity and complexity,” he said. Gensler also said the following regarding cryptocurrencies:
“I’ve been in finance for 44 years, and I have never seen an area (crypto) with as much misconduct as this. It’s frightening.”
In October 2022, COINOTAG reported that SEC staff lacked the knowledge needed to create rules for the crypto market. As a result of Gensler’s tenure as Chairman, it was revealed that probably 20% of senior attorneys and officials were missing. There were also speculations of internal division within the agency regarding rulemaking for digital assets.
When asked about spot Bitcoin ETFs, Gary Gensler refrained from giving clear answers, stating that they are still reviewing these applications and have a lot of thoughts on the matter. He also mentioned that they are currently reviewing a court decision that found in favor of Grayscale.
SEC Chairman Exercises Caution
In his opening statements, SEC Chairman Gensler issued a disclaimer that his comments during the hearing do not represent the agency or its staff. This means that Gensler continues the recent practice of cautioning against criticisms of his comments on the crypto market. Importantly, SEC Chairman Gensler stated in his pre-hearing statement that he cannot comment on any active or ongoing cases. He said:
“While I am happy to discuss the Commission’s work, I want to note that I cannot comment on any active or ongoing cases.”
In this regard, Gensler did not comment on some of the most important ongoing cases in the crypto market, including Grayscale’s Bitcoin ETF application and the XRP lawsuit. In the final rulings of these two cases, the SEC had a favorable outcome for Ripple in the Summary Judgment of the XRP case, and in the Grayscale vs. SEC case, the judge approved the company’s Grayscale Bitcoin Trust’s conversion into a spot Bitcoin ETF.
Previously, COINOTAG reported that crypto exchange Coinbase called for adopting a legal approach to create crypto regulation that ensures consumer protection. The U.S.-based exchange argued that a focus on enforcement alone risked four million jobs by 2030 due to regulatory uncertainty.
Meanwhile, following Gary Gensler’s testimony, the price of Bitcoin did not show a significant deviation and the cryptocurrency continues to maintain its 24-hour gains. It is still unclear if further questioning of SEC Chairman on crypto will have any impact on the market.
