- Gary Gensler is set to appear before a Senate Appropriations Committee hearing coming soon.
- Amongst the many bone of contentions, he has been sharing concerns about crypto exchange compliance.
As his Senate hearing draws near, Gary Gensler, the Chairman of the United States Securities and Exchange Commission (SEC) has expressed concerns about certain cryptocurrency exchanges. During a webinar that was held recently, the SEC Chief who is scheduled to testify before the Senate Appropriations Committee next Wednesday highlighted crypto exchanges operating “conflicting services.”
Gensler also raised the issue of “limited risk monitoring” in the broader cryptocurrency market while articulating some negative views on these exchanges.
As a clear example, he cited the ongoing investigation of American cryptocurrency exchange Coinbase Global Inc. In June, Coinbase was indicted by the US regulator in a federal court in New York for offering unregistered securities, operating as an unregistered broker and exchange operator, and violating regulatory requirements. Since that time, the SEC has been investigating the leading crypto exchange.
Similarly, Binance, Binance U.S and the exchange’s CEO Changpeng ‘CZ’ Zhao were sued by the SEC for breaking securities rules, misleading investors and regulators, as well as allegedly mishandling customer funds. As part of the 136-page complaint against the top crypto firm, the SEC claimed said Binance flouted basic Know-Your-Customers (KYC) rules and allowed Americans to improperly open accounts and trade on its platform.
Gensler to Provide Insights in Upcoming Senate Hearing
The upcoming hearing which would be presided over by Senator Van Holle is scheduled for 02:45 PM on and will be held in Room 124 of the Dirksen Senate Office Building.
At this anticipated Senate Appropriations Committee hearing, the fiscal year 2024 budget for the SEC will be reviewed, with a focus on financial services and general government sectors. It is Gensler’s responsibility as the head of the SEC to provide valuable insights about the budgetary needs of the agency in the upcoming fiscal year.
Several questions will be thrown at him by members of the committee as part of the unique funding mechanism established by the Dodd-Frank Act for the SEC, a provision that is different from that of other agencies. The aim is to strengthen the financial system and to empower the commission to fulfill its oversight functions.
Markedly, the SEC boss will explain the agency’s plans for customer and investor protection. Gensler will also shed light on how the SEC intends to maintain fair and orderly markets, as well as facilitate capital formation.
The committee will look into the SEC’s funding requirements and its ability to effectively meet up with the evolving financial landscape including the cryptocurrency world in terms of regulation.
Meanwhile, institutional investors are still waiting for the SEC’s decision on the multiple spot BTC Exchange Traded Fund (ETF) applications on its desk.
After the likes of BlackRock, Fidelity Investment, WisdomTree, and Valkyrie filed to secure approval to list a Bitcoin ETF product, the SEC initially rejected their filings but noted that they could be resubmitted when with details on surveillance sharing agreements (SSA).
While many of these firms have also made this move, Eric Balchunas, a senior ETF Analyst for Bloomberg believes that showing their SSA could be “pointless” in the commission’s eyes in the push to approve the application.
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