Securities and Exchange Commission Chair Gary Gensler stuck to his time-tested talking points in a Wednesday interview with Yahoo Finance even as criticism mounts for not doing anything to prevent the implosion of crypto exchange FTX.
Gensler, who’s previously called crypto “the Wild West” and launched several enforcement actions against the sector, once again called on crypto companies operating in the country to “come into compliance” with U.S. securities laws or face the consequences.
“The runway is getting shorter,” Gensler told Yahoo Finance.
The SEC and the Commodity Futures Trading Commission have been jostling for control of crypto regulations for several years. A bill proposed by Sens. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) earlier this year would give the CFTC more oversight, but Sen. Elizabeth Warren (D-Mass.) is working on a separate bill that instead would give more authority to the SEC, which has been tougher on crypto, according to Semafor.
Gensler reiterated in the Yahoo Finance interview that his agency would benefit from having more resources and more “extraterritorial reach overseas,” without elaborating on any specific enforcement methods.
The SEC chair refused to speak specifically about FTX and disgraced former CEO Sam Bankman-Fried, and would not say whether FTX had violated U.S. securities laws. Still, Gensler acknowledged that U.S. law requires companies to properly segregate funds.
“The New York Stock Exchange doesn’t also have a hedge fund on the side, and trade against their customers,” he added.
Gensler has made headlines with a handful of high-profile enforcement actions—what critics have called “regulation by enforcement”—that have done little to prevent wide-scale fraud or the misuse of customer funds, both of which FTX stands accused, or Terra’s $60 billion implosion.
Despite the criticism, Gensler told CNBC last month that “building the evidence, building the facts, often takes time.” And in the Yahoo Finance interview, Gensler said he was happy with some of his agency’s enforcement actions, including those against BlockFi and Coinbase in the last couple of years.
As the contagion linked with FTX’s collapse last month continues to spread, notable business leaders and politicians have continued to voice concerns over the sector.
In a Tuesday interview with CNBC, JPMorgan CEO Jamie Dimon compared cryptocurrencies to “pet rocks,” meanwhile in Congress, Warren and Sen. Dick Durbin (D-Ill.) have demanded FTX send over documents, including copies of balance sheets for its subsidiaries, according to CNN.
