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Gary Gensler’s Comments In Congressional Hearing Today:

By September 12, 2023No Comments7 min read
September 12 2023 Gary Genslers Comments of the SEC In Congressional Hearing

Today, 12th of September 2023 Gary Gensler the chairman on the SEC (security and exchange commission) stands Infront of the senate hearing to give oversight of the SEC. The hearing is not specific to crypto and the digital asset space however this is of course a hot topic, some of the topics discussed in this meeting are , Ai, Agriculture, pension and mutual funds and of course digital assets.

Digital asset comments made by Gary Gensler:

Mr Gensler was asked by Mr . Brown, ‘If crypto market lived up to the investor protection principles we have in other markets would that help protect americans from the crypto abuses that cost consumers billions $$”

September 12 2023 Gary Genslers Comments of the SEC In Congressional Hearing

Genslers reply: “if they where to live up to the investment protection built into our current laws it would help investors but right now unfortunately there’s significant non compliance and its a field which is rife with fraud abuse and misconduct”

Off to a good start!

Ms Cortez Masto hits Gensler with the next digital asset related question: “The enforcement that you’re undertaking with respect to crypto, there was a challange at the time because you were under staffed, do you feel confortable now that you have the staff that you need perticularly on the enforcement side when it comes to the fraud that we are seeing related to some crypto”

September 12 2023 Gary Genslers Comments of the SEC In Congressional Hearing

Gary Gensler’s reply: ” the agency is only 3% larger then we where 7 years ago, I would say no we are not large enough as an agency given that the markets have grown 50-70% in terms of activity and complexity etc. In term of crypto more narrowly I’ve been around finance for 44 years now i guess and I’ve never seen a field that’s so rife with misconduct, its daunting”

No nice words to be said as of yet in regards to the crypto space….

The next question is posed by Mr Hagerty: ” last month the US court of appeals for the district of collumbia unanimously ruled that the SEC denial of greyscale spot bitcoin ETF was quote arbitrary and capricious. They argued that the product is mathematically indistinguishable from already approved futures products currently trading on US exchanges. So my question is can you explain what the SEC needs to see in a filing to approve a stop bitcoin ETF and what questions do you still need answered from ussuers about the market and or market infrastructer in order to allow this to happen i’d like to get some clarity”

September 12 2023 Gary Genslers Comments of the SEC In Congressional Hearing

Gensler’s reply: Senator I thank you for the question we’re still reviewing that decision, we have multiple filings around bitcoin exchange traded products so its not just a the one mentioned but multiple different others who were reviewing them and I’m looking forward to staffs recommendations”

No clarity or cards declaired from the chair of the SEC

The following Crypto related question is asked by Ms Luumis ” Staff accounting bulletin 101 requires that companies including banks place crypto assets under custody on thei balance sheets and even FED chairman powel has agreed that this is unprecedented in financial regulation in the us. So my first question is you said repeatedly this is to provide greater consumer protection and like we saw in the celcesui bankrupcy last year where thousands of customers were made unsecured creditors, isn’t it true that placing custody assets on the companies balance sheet could result in consumer assets being seized by creditors in the event of a bankrupcy and that that would hurt consumers.

September 12 2023 Gary Genslers Comments of the SEC In Congressional Hearing

Gensler’s reply : ” your absolutely right about the Celsius filing but what was interesting about that bankruptcy was that a judge said that these are not segregated protected assets by and large, that the investors where just lining up in bankruptcy and that was regardless of a staff accounting bulletin that the SEC put out because Celsius was a private company the staff accounting bulletin was, staff advice on how to do accounting in public companies and the reason the staff came to that conclusion which is different than for stocks or bonds in custody is because the laws in the us right now tend to be that you can’t segregate those crypto assets the way Celsius was taking it on and that the judge said your just in line. by the way that also happened at Voyager its happened at FTX its happened at the terra Luna its happened at each of these various bankruptcy’s

Lummis then goes on to say: ” Let’s then talk about the relationship of bulletin 121 to banks so the requirement prevents banks from offering crypto asset custody, because it requires the assets to be backed 141 by the US dollar and if that standard was applied to legacy custody baks like BNY melon they would have to have trillions in regulatory capital, so that prevents the most heavily regulated financial institution in the country from offering custody so if you ultimate goal is to provide real consumer protections shouldnt the SEC withdraw staff accounting bulletion 121 to allow banks to provide custody?”

his reply ” so a staff accountant bulletin is just about public companies and how to properly show that to investors in those banks and its investors not the people getting the custody. The bank regulators are free to address how they treat capital however they wish to treat capital. what this is just about is the balance sheet have those custody need crypto is a liability but they also have the crypto as an asset we dont speak to how its backed that’s up to the bank regulators”

Luumis is at least on the face of it pro crypto!

the next question come from Ms Sinema: ” we’ce seen some recent legal setbacks for the agency perticularly in respect to the crypocurrency, so how are you assesing the agencies litigation risk with respect to the breadth of your rule making strategy”

September 12 2023 Gary Genslers Comments of the SEC In Congressional Hearing

Gensler replies: ” we take congresses mandates to us and authorities we have very seriously but also how the courts interoperate them and we are dedicated and committed to doing things just within our authorities and how the courts interoperate in but we get a lot of feedback from the public on that”


a continued tone through the hearing was the over zealousness the SEC has for regulating when not mandated to do so, this is all part of the political game and actually surprisingly there was less crypto related question then expected however Gensler continued to reiterate his strict tone towards the cryptos space. regulation are a key part of this industry going mainstream in the US and more broadly around the world and Gensler is a hurdle to over come!


With over 7 years of hands-on experience as a crypto investor and an additional 12 years observing the industry, I've witnessed the evolution of the crypto landscape firsthand. My journey has been marked by significant successes, but not without its fair share of learning experiences. I'm eager to impart my insights to you, helping you navigate this space without repeating the missteps I encountered.

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