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Two-faced? US Senator: SEC Chairman said he will help FTX exploit legal loopholes, but then told the media they will investigate thoroughly

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Two-faced? US Senator: SEC Chairman said he will help FTX exploit legal loopholes, but then told the media they will investigate thoroughly

American lawmakers have accused SEC Chairman of potentially aiding SBF and FTX in exploiting legal loopholes, leading to an ongoing investigation. The next day, Gary Gensler declined to disclose any progress on the investigation into the FTX incident, citing its confidential nature, and did not respond to the accusations made by the lawmakers.

Double-Edged Sword Demon Gary Gensler?

U.S. Congressman Tom Emmer tweeted on the evening of 11/10:

Interesting, SEC Chairman Gary Gensler talked extensively about regulating the crypto market in the media, while also reporting to my office that he is assisting SBF and FTX in obtaining regulatory monopolies. I am investigating this matter.

This tweet has garnered a lot of attention, mostly from the vast crypto community, directed at their dislike for Gary Gensler.

CNBC Interview

Andrew Ross Sorkin: A lot is happening in the crypto market, what do you know? What are you investigating?

Gensler: You know I cannot publicly discuss any investigations. Regarding the crypto market, events such as the collapse of Terra, crypto lending platforms, etc., are all interconnected. Participants operating without disclosure terms have taken users' money, traded with a lot of leverage, and when the market turns, many users lose money. This is where our responsibility to users lies.

Q: Well, some may criticize, saying you only talk about the necessity of regulation. So, SEC successfully charged socialite Kim Kardashian, does that fulfill regulatory responsibilities compared to FTX's collapse?

We have many ways to regulate, one is through cooperation with exchanges and lending platforms; the second is enforcement, the former and current SEC teams have conducted over 100 enforcement actions, such as the significant victory we had in the LBRY case this week.

Q: But Gary, more fairly, now millions, even billions of dollars are locked up, not only retail investors, but also venture capital, pension funds, etc., all potentially facing losses, shouldn't this be regulated more?

This is not like the NYSE or Nasdaq, where exchanges and a few lending platforms are intertwined, it is a toxic combination. It takes time to gather evidence and facts. I'll give you a public example; we issued a subpoena to Terra as early as September last year, actually starting the investigation even earlier.

But this case was questioned by the district court, an appeal to the Supreme Court would take another year, allowing the defendants time to prepare. I believe a better approach is cooperation and regulatory registration.

CNBC has a longer interview segment, but based on Gary Gensler's premise of not discussing ongoing investigations, most of his responses did not provide more clues on the FTX incident and the current market situation, and he had not responded to Congressman Tom Emmer's accusations on Twitter as of the deadline.