Gary Gensler, who is in charge of the U.S. Securities and Exchange Commission (SEC), faced tough questions from the Senate Banking Committee about various topics, including artificial intelligence and rules for cryptocurrencies.
In his prepared statement, Gensler once again emphasized that he thinks the SEC should be responsible for overseeing the cryptocurrency market.
However, when the committee asked him about approving cryptocurrency spot exchange-traded funds (ETFs), he didn’t give a clear answer.
Eleanor Terrett’s Hearing Highlights
In Eleanor Terrett’s analysis of the hearing, she pointed out a few important things. First, cryptocurrency, which had been a big topic before, wasn’t as important this time. Instead, lawmakers from both the House and the Senate talked about how quickly Gary Gensler was making rules and how long people had to give their opinions on them.
Surprisingly, the spotlight was on Artificial Intelligence (AI) during the hearing, showing a change in what people cared about. Additionally, the hearing showed that there’s more political division, which could make it harder to make rules for cryptocurrencies.
Some takeaways from the @GaryGensler hearing:
1. #Crypto only made up a small portion of today's questions, compared with previous House hearings where it was a bigger focus.
2. Gensler's rulemaking pace and length of the comment periods are a concern in both chambers of…
— Eleanor Terrett (@EleanorTerrett) September 12, 2023
Lack of Clarity Regarding Spot Bitcoin ETFs
The main focus of the discussion was the uncertainty surrounding the approval of Bitcoin ETFs. When Senator Hagerty asked Gary Gensler about this, he didn’t give a clear answer. Instead, he mentioned that there are several spot ETF applications, including ones not related to Grayscale, currently under review. This response left room for interpretation, as he seemed to be waiting for the Staff’s recommendation.
Eric Balchunas, a senior ETF analyst at Bloomberg, noted that Gensler’s reply appeared cautious and lacked a direct response to the senator’s question. Gensler’s reference to multiple filings, apart from Grayscale, didn’t provide much clarity on the matter. It remains uncertain whether Gensler’s comments will have any impact on the cryptocurrency market, particularly Bitcoin’s price.
Panel Criticizes Gensler’s Approach to Regulation
Senator Lummis, who supports digital assets, had concerns about an SEC guideline. This guideline suggests that companies should include cryptocurrencies on their balance sheets if they manage them for customers. Lummis was worried that this could make banks hesitant to offer crypto custody services.
In response, Gensler clarified the SEC’s position. He pointed out that cryptocurrencies are different from regular securities, making it challenging to treat them separately. He emphasized that how banks manage their capital in this situation is a matter for banking regulators, not the SEC.
It’s important to note that the SEC, under Gensler’s leadership, isn’t solely focused on taking action against cryptocurrency platforms like Coinbase and Binance. They have also proposed rules that aim to align the digital asset industry with existing U.S. securities laws.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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