SEC Chair Gary Gensler testified at a Congressional hearing on the agency’s oversight before the Senate Committee on Banking, Housing, and Urban Affairs. Gensler highlighted the significant non-compliance and prevalence of fraud, abuse, and misconduct in the crypto industry.
Cautionary Remarks by SEC Chair:
During his opening statements, Gensler clarified that his comments during the hearing do not represent the views of the SEC or its staff. This continuation of his recent practice comes in response to criticism directed at the SEC for his remarks regarding the crypto market. Notably, Gensler refrained from addressing questions about the agency’s recent setbacks, including the XRP and Grayscale lawsuits.
No Comment on Ongoing Crypto Lawsuits:
Interestingly, prior to the hearing, Gary Gensler stated that he would not be able to comment on any active litigation. He specifically mentioned:
“While I’m happy to discuss the SEC’s work, I will not be able to comment on any active, ongoing litigation.”
This indirectly indicated his refusal to comment on significant lawsuits in the crypto market, such as Grayscale’s application for a Bitcoin ETF and the XRP lawsuit. Recent judgments in these cases have not been favorable to the US SEC, with Ripple winning the Summary Judgment in the XRP lawsuit and the judge ruling in favor of Grayscale in the Grayscale vs. SEC lawsuit, approving the conversion of its Grayscale Bitcoin Trust into a spot Bitcoin ETF.
Coinbase’s Legislative Approach:
Coinbase, a prominent US-based crypto exchange, has advocated for a legislative approach to establish crypto regulations that prioritize consumer protection. The exchange argues that relying solely on enforcement without regulatory certainty puts around 4 million jobs at risk by 2030.