In his testimony before the Senate Banking Committee, Gary Gensler, chair of the U.S. Securities and Exchange Commission (SEC), said that the cryptocurrency industry is "a field which is rife with fraud, abuse, and misconduct." Additionally, he mentioned that the applications for spot bitcoin exchange-traded funds (ETFs) are currently being reviewed by the securities authority.
Testimony of Gary Gensler Before Senate Committee
On Tuesday, Gary Gensler, the head of the Securities and Exchange Commission (SEC), spoke before the U.S. Senate Committee on Banking, Housing, and Urban Affairs. He discussed cryptocurrencies.
Gensler reiterated to lawmakers that, "without prejudging any one token, the vast majority of crypto tokens likely meet the investment contract test," indicating that the majority of crypto tokens are securities. The majority of crypto intermediates must adhere to securities regulations as well, since the majority of crypto tokens are governed by the securities laws.
The SEC's head emphasized:
Regarding cryptography... I've spent 44 years in the financial industry. I've never encountered a field with such a high prevalence of wrongdoing. It's simply intimidating.
He continued by saying of the cryptocurrency sector: "Right now, unfortunately, there's significant non-compliance and it's a field which is rife with fraud, abuse, and misconduct."
Following a recent court decision in favor of Grayscale Investments, Senator Bill Hagerty (R-TN) questioned Gensler during the hearing about what the SEC needs to see from issuers in order to approve spot bitcoin exchange-traded funds (ETFs). According to the court, the securities regulator's decision to reject Grayscale's request for a spot bitcoin ETF was "arbitrary and capricious." SEC Chair's retort:
We are still deliberating that choice. We have other registrations pertaining to exchange-traded products for bitcoin, so it's not just the one you mentioned but a number of others as well. I'm forward to hear the staff's recommendations when we review them.
What are your thoughts on Gary Gensler's assertions? Do you too believe that a spot bitcoin ETF will soon be approved by the SEC? Comment below with your thoughts and let us know.