SEC Chairman Gary Gensler discussed his approach to cryptocurrency regulation, the challenges of enforcement, and the SEC’s broader role in ensuring market integrity in a candid interview.
Gensler noted ongoing problems in the crypto space, calling it a “highly speculative space” due to lack of compliance with securities, anti-money laundering, and sanctions laws. While acknowledging that Bitcoin is not classified as a security, he noted that “10,000 to 15,000 other tokens” have often failed to meet disclosure and compliance requirements, leading to significant investor losses over the years.
Gensler also defended the SEC's actions by noting that Congress sets the laws that the SEC is tasked with enforcing, citing the fundamental need for proper disclosure to protect investors from fraud and manipulation.
The SEC’s handling of the Coinbase case has also been a source of controversy. Recent judicial feedback has called on the SEC to provide clearer explanations of its regulatory actions, with the court warning against “another weak explanation.” Gensler said the SEC is simply applying existing laws rather than creating new ones.
Gensler defended his record on Bitcoin, noting that ETFs based on Bitcoin futures were approved during his tenure. However, he called for appropriate disclosures to address this volatility, noting that Bitcoin, like gold, is traded largely on sentiment rather than fundamentals.
When asked whether his leadership has hindered or under-scrutinized the crypto industry, Gensler directed attention to the SEC’s broader accomplishments, such as reforms to the equity and treasury markets and corporate governance improvements.
Gensler also highlighted reforms beyond crypto, including shortening the clearing cycle for stocks, addressing issues in the $28 trillion U.S. Treasury market, and implementing stricter rules on insider trading. He argued that the crypto sector, despite garnering significant public attention, represents a small portion of the $120 trillion U.S. capital markets.
The interview concluded with a brief discussion of prediction markets, a growing industry that includes platforms like Calshi. Gensler declined to comment on Calshi’s decision to hire Donald Trump Jr. as an advisor.
*This is not investment advice.
