FTX Probe Ignites Debate: SEC’s Gary Gensler Grilled By Senator for Crypto Oversight

In a recent fiery confrontation on Capitol Hill, Senator Kennedy confronted Gary Gensler, the Chairman of the U.S. Securities and Exchange Commission (SEC), questioning the agency’s authority and competence in curbing fraud within the cryptocurrency industry.

He zeroed in on the case of FTX, the crypto exchange founded by the “over-haired” and “under-dressed” young billionaire, Sam Bankman-Fried. The senator expressed incredulity that the SEC had not proactively investigated FTX despite the conspicuous activities and grand ambitions of its founder.

Kennedy highlighted that the SEC’s regulatory machinery, intended to guarantee transparency and combat fraud, appeared to have failed in the face of this disruptive new industry. He criticized the SEC for not sending investigators to probe FTX and for failing to halt its operations until basic, fundamental questions were answered.

Related: Crypto Regulations Concerns Rise as SEC Can’t Classify Syndicated Loans

Gensler On the Defence

Chairman Gensler offered a robust defense, acknowledging the complexities of regulating the crypto field, where abuses and fraud often intertwine with offshore services. He emphasized that the SEC had been actively investigating and taking action against numerous companies. Nonetheless, he conceded that these efforts require considerable time, given the vast number of tokens and actors within the crypto realm.

However, Kennedy remained unsatisfied, asserting that with proper initiative, the SEC could have quickly shut down FTX’s operations through a court injunction.

Congress Jumps In

The confrontation between Senator Kennedy and Chairman Gensler reverberated across Congress, eliciting strong reactions from other lawmakers.

Congressman Dusty Johnson took to Twitter to condemn the SEC’s strategy of “regulating by enforcement.” He argued that the numerous lawsuits against digital asset firms were not protecting the public and were hampering innovation and growth in the industry.

Also Read: US Congressman Questions SEC’s Actions: “I’m Calling for an Investigation”

Let Consumers Decide!

Similarly, Congressman John Rose announced the introduction of H.R. 4657, a bill aimed at restricting the SEC’s ability to enforce what he calls “moral and social policy.” He accuses the SEC, under Gensler’s stewardship, of overstepping its mandate by imposing its progressive political agendas on retail investors and retirement savings.

“If the American people want companies to take certain actions or political positions, they will exercise those desires through their pocketbooks and consumer choices—not the heavy hand of government.” – Rep John Rose