The Chair of the United States Securities and Exchange Commission (SEC), Gary Gensler, appears to be getting fed up with answering questions about crypto, recently commenting he receives an “outsized ratio” of questions about it compared to traditional finance.
“Crypto is a small piece of our overall markets,” Gensler said on CNBC’s Squawk Box on May 7, responding to a question on where the SEC’s priorities lie.
Gensler compared the “$110 trillion capital market” the SEC oversees with the $2.4 trillion crypto market, claiming much of the latter doesn’t comply with U.S. securities laws so it has “an outsized piece of the scams and frauds and problems in our markets.”
“And so thus, you end up with like an outsized ratio of journalist questions and crypto journalists to market cap.”
Host Andrew Ross Sorkin asked if the media’s crypto questions are because that’s where the SEC’s attention seems to be focused, to which Gensler quickly rebutted that “it’s a function of where your attention is.”
SEC Chair @GaryGensler: "Crypto is a small piece of our overall markets. But it's an outsize piece of the scams and frauds and problems in our markets." pic.twitter.com/UIbTLfTDuN
— Squawk Box (@SquawkCNBC) May 7, 2024
“Think about it. I’ve been on your show, what, a dozen times? And every show, you ask about crypto,” the SEC boss said.
“My guessing is this will be a majority crypto interview. While the capital markets are $110 trillion. So it’s also about where the financial media is focused.”
Gensler then evaded back-to-back questions — the first on the SEC’s Wells notice to Robinhood, which alleged its crypto listing and custody services violated securities laws — saying he “can’t speak to any one company.”
He claimed investors weren’t getting “the required or needed disclosures” about crypto and that “many of those tokens are securities under the law of the land, as interpreted by the U.S. Supreme Court.”
Paul Grewal, Coinbase’s legal chief — a company locked in a legal fight with the SEC — told Gensler on X to “please stop misleading the market — tokens are NOT securities.”
“Their pleadings notwithstanding, your own attorneys have admitted this in court,” Grewal added.
Gensler also dodged answering if Ether (ETH) was a security or not and if the SEC would approve a related exchange-traded fund (ETF), only saying that “those filings will take up at the appropriate time” by the five SEC commissioners.
Gensler also defended against House Financial Services Chair Patrick McHenry’s allegation that he “misled Congress” when he “refused to answer” questions on the SEC’s classification of ETH.
“We don’t speak about whether we have an investigation,” he said. “We don’t speak about whether somebody is, in our opinion, not following the law unless we actually bring a case.”
McHenry claimed Gensler’s answer refusals were an “intentional attempt to misrepresent” the SEC’s position and cited a Consensys April lawsuit against the SEC that alleged the regulator planned to regulate ETH as a security.
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Gensler, however, argued that he tells Congress “accurately what we’re doing.”
“We stay quiet on many questions that you might ask at this live interview or even in a congressional hearing,” he said.
The SEC has filed six crypto-related lawsuits so far in 2024. It brought 46 enforcement actions against crypto firms in 2023, a 10-year high and over double the number in 2021.
At least a dozen court cases launched by the SEC are still working their way through U.S. courts, with many defendants pinned on allegations they sold unregistered securities and operated illegally.
Magazine: Crypto regulation — Does SEC Chair Gary Gensler have the final say?
