SEC Chair Gary Gensler Raises Crypto Exchange Concerns Prior To Senate Hearing

SEC Chairman Gary Gensler is set to testify before the Senate Appropriations Committee on Wednesday, July 19, 2023. He has expressed concerns about cryptocurrency exchanges operating conflicting services and limited risk monitoring ahead of his testimony during a recent webinar.

Gary Gensler on Fiscal Year 2024 Budget

The committee will review the fiscal year 2024 budget for the SEC, focusing on the financial services and general government sectors. The hearing, which will be held at 02:45 PM in Room 124 of the Dirksen Senate Office Building, will be presided over by Senator Van Hollen. As the head of the regulatory agency responsible for overseeing the securities industry, Chair Gensler will provide insights into the SEC’s budgetary needs for the upcoming fiscal year.

The Senate Appropriations Committee is expected to have numerous questions for Chair Gensler due to the unique funding mechanism established by the Dodd-Frank Act for the SEC, which differs from that of other agencies. The Dodd-Frank Act, enacted in response to the 2008 financial crisis, introduced several regulatory reforms aimed at strengthening the financial system.

Chair Gensler’s testimony will shed light on the SEC’s initiatives to protect investors, maintain fair and orderly markets, and facilitate capital formation. The Senate Appropriations Committee will closely examine the agency’s funding requirements and its ability to effectively regulate the evolving financial landscape.

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SEC Chief Skeptical Of Crypto Exchanges

In preparation for the hearing, Chair Gary Gensler has expressed concerns about cryptocurrency exchanges and their operation of “conflicting services.” During a recent webinar on July 12, he emphasized the issue of “limited risk monitoring” in the cryptocurrency market and expressed negative views on these exchanges.

One specific case highlighted by Gensler is the ongoing investigation into Coinbase, a leading cryptocurrency exchange platform. The SEC is investigating allegations of Coinbase’s involvement in unregistered securities, brokerage, and clearing services.

Senior ETF Analyst for Bloomberg, Eric Balchunas, alleges that efforts by institutional players like BlackRock and CBOE to show their SSA could be “pointless” in the commission’s eyes.