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SEC Chair Gensler Faces Scrutiny for Crypto Custody Guidance

In his testimony before Congress on Wednesday, Chair of the U.S. Securities and Exchange Commission (SEC) Chair, Gary Gensler, maintained a confrontational stance against cryptocurrency “hucksters.”

SEC Chair Gensler holding bitcoin logo

He refrained from addressing the industry’s most pressing inquiries while emphasizing his belief that digital asset firms have exhibited alarming negligence in handling customer assets.

Sidestepping questions concerning Bitcoin ETFs, Gary asserted during his testimony that cryptocurrency companies blend assets in a manner prohibited in other segments of the financial system, raising concerns about potential risks.

Gary went on to express his appreciation for testifying before the House Financial Services Committee during the hearing on September 27th. On that day, he had the opportunity to testify for more than four hours, during which a significant portion of the discussion revolved around critiques of his agency’s policies and initiatives.

During his address to the House Financial Services Committee, Gensler reiterated his ongoing concerns about how cryptocurrency firms handle their customers’ funds, emphasizing that combining assets has not yielded positive outcomes.

Additionally, the head of the securities agency mentioned that they have yet to make a decision regarding a judge’s ruling that has prompted the SEC to re-evaluate its stance on spot Bitcoin exchange-traded funds (ETFs).

Just yesterday the SEC delayed Ark 21Shares’ spot Bitcoin ETF to January.

Gensler stated during his testimony, “it’s still an active consideration of the commission… We have great respect for the courts.”

In August, a judge in the D.C. Circuit Court of Appeals instructed the SEC to reconsider its stance on Bitcoin ETF applications, with Circuit Judge Neomi Rao finding the agency’s rejection in the Grayscale Investments case to be “arbitrary and capricious.” Gensler’s testimony did not disclose the agency’s future actions or a timeline for its decision.

Chairman Rep. Patrick McHenry (R-N.C.) of the panel acknowledged the SEC’s string of legal losses and denounced its vigorous pursuit of the digital assets ecosystem, which he contended was sowing confusion and causing enduring harm in the industry.

When it was his opportunity to question Gensler, he succeeded in obtaining Gensler’s latest affirmation that Bitcoin is “not a security.”


Additionally, a U.S. congressman called for the firing of Gary, citing his abuse of power and pushing a woke political agenda against the digital asset industry.


Is Gary’s time up?

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