US Senators Push for Increased Oversight of Cryptocurrency

Senators from both political parties responsible for overseeing the Securities and Exchange Commission (SEC) have urged SEC Chair Gary Gensler to take even stricter actions against cryptocurrency companies.

During Wednesday’s testimony, Sen. Dick Durbin, a Democrat from Illinois and the second-highest-ranking member of his party in the Senate, used a significant portion of his allotted time to express his concerns about the crypto industry and to urge Gensler to adopt a more assertive approach in regulating it.

“They spent billions on sports arena or stadium naming rights deals to gain misguided credibility with everyday Americans and manipulate prices with phony tokens of no underlying value,” Durbin said, while also noting accusations levied at FTX, Binance, and others of failing to adequately protect or safeguard customer assets. “This is happening over and over again. This doesn’t sound like America.”

Durbin continued to question the SEC chair on how best to ensure the protection of American consumers from the potential risks associated with cryptocurrency in the future.

While acknowledging the existence of numerous “bad actors” in the crypto industry, Gensler defended the fundamental technology behind cryptocurrencies. He emphasized the need for increased funding for the SEC to strengthen its oversight and regulation of the industry.

Gensler also expressed criticism towards the integration of various market functions within cryptocurrency trading platforms, reiterating a previous point he had made. He emphasized that allowing platforms to trade against their own customers would be unacceptable in traditional financial markets like the New York Stock Exchange.

Sen. John Kennedy, a Republican from Louisiana, raised a question to Gensler about why the SEC did not pursue an emergency injunction to compel the troubled cryptocurrency company FTX to suspend its operations before its collapse in November. The SEC had also recently attempted, but failed, to obtain a complete injunction to halt operations by Binance.US, another cryptocurrency exchange.

“Why didn’t you do that? That’s what we pay you folks to do,” Kennedy asked, while also referring to failed crypto mogul Sam Bankman-Fried as “the fourth runner up in a John Belushi lookalike contest.”

Gensler essentially responded that investigations take time.

“We investigate by the book. You, I’m sure, and the American public, want us to follow the facts, follow the law, properly get people subpoenas,” adding that investigation targets “effectively burn clock.”

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