During testimony before the House Financial Services Committee, the Chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, affirmed that the agency will continue to enforce strict laws on local crypto platforms. In response, Committee Chairman Rep. Patrick McHenry expressed concern that the SEC’s aggressive approach could drive such firms away from the USA, hampering innovation.
Gensler revealed that he has never owned any digital assets, which he classifies as “highly speculative.” This is a shift from his earlier stance in which he expressed intrigue for the crypto sector.
Exchanges ‘Don’t Have a Choice’
Gensler faced criticism from House Republicans who claimed that the SEC’s actions have weakened America’s position as a center for cryptocurrency innovation. McHenry argued that the agency should not rely on “regulation by enforcement,” labeling the method as insufficient and unsustainable.
“Your approach is driving innovation overseas and endangering American competitiveness.”
Gensler denied the claim that US crypto exchanges do not know how to comply with the law, stating that there is a clear regulatory framework that such platforms should follow:
“We have a whole field in crypto that understands the law, and if they are providing exchange services, broker-dealer services, clearing services of crypto security tokens, they should come into compliance. They don’t have a choice. They’re noncompliant generally, and they need to come into compliance.”
The regulatory uncertainty in the US has already become an obstacle for some crypto organizations. CEO of Coinbase, Brian Armstrong, recently hinted that his platform might relocate if proper legislation on the industry is not implemented by domestic watchdogs.
Gensler is not a HODLer
Gensler also declared that he has never personally owned bitcoin or any other cryptocurrencies, adding that the only digital assets he has are his “bank account” and “brokerage account.” Despite not being asked about his view, he called the asset class “highly speculative.”
However, this is a shift from his earlier affirmation of the crypto sector in the summer of 2021, in which he stated, “While I’m neutral on the technology, even intrigued, I spend three years teaching it, leaning into it – I’m not neutral about investor protection. If somebody wants to speculate, that’s their choice, but we have a role as a nation to protect those investors against fraud.”