Gary Gensler on Cryptocurrency Regulation: Balancing Innovation and Compliance

On June 25, Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), spoke with Bloomberg’s Annmarie Horden at the Bloomberg Invest Summit. During the conversation, Gensler addressed the intersection of cryptocurrency and securities laws, the policy implications of cryptocurrency regulation, and his current priorities at the SEC.

Crypto Securities and SEC Regulations

Gensler emphasized that there is no inconsistency between crypto securities and existing securities laws. He noted that the rules governing securities are clear and have been established to protect investors and ensure fair, orderly and efficient markets. Despite this, you acknowledged that a significant number of entities within the crypto space do not comply with these laws. This noncompliance is a critical issue that the SEC aims to address through its regulatory oversight.

Political landscape and regulation of cryptocurrencies

The discussion highlighted the cryptocurrency’s growing political significance, with former President Trump planning to speak at a major conference on Bitcoin and vow to end what he calls “Joe Biden’s war on cryptocurrencies.” Mark Cuban also suggested that Gensler’s actions could potentially impact the upcoming election. In response, Gensler refrained from commenting on political matters, reiterating that his focus is solely on his role as a securities regulator.

Gensler said his primary responsibility is to protect investors and supervise issuers, ensuring access to fair, orderly and efficient markets. He said other individuals might engage in political discourse, but his mandate is to uphold the integrity of capital markets.

Current initiatives and future plans of the SEC

Gensler shared his sense of privilege in serving as chair of the SEC and his commitment to advancing the agency’s mission. He highlighted several key initiatives the SEC has been working on, including:

1. Transition to the T+1 settlement cycle: The SEC has implemented a significant transition to a one-day clearance and settlement cycle, which aims to reduce risk and improve market efficiency.
2. Treasury clearing rules: Gensler stressed the importance of stabilizing the $7 trillion Treasury bond market, which has experienced periodic fragilities. The implementation of new Treasury clearing rules is a priority to ensure market robustness.
3. Rule proposals in progress: The SEC has proposed several rules that have yet to be adopted. Gensler noted that while there is no urgency to finalize these rules before the election, the goal is to strengthen markets for the benefit of the American public.

Gensler concluded by saying that serving the American people and protecting investors is his primary goal. Whether he remains in office until the end of his term in 2026 or he leaves sooner, he sees his role as a public service and a cornerstone of democracy in action.

Source