For a Sense of Gensler’s SEC, See His CFTC

In his highly anticipated Senate hearing this morning, SEC Chair candidate Gary Gensler presented tech savvy and powerful understanding of the regulatory challenges facing the crypto industry. 

Gensler’s opening statement stressed “strengthening transparency and accountability in our markets, so people can invest with confidence, and be protected from fraud and manipulation.” 

Chen Arad is the COO of Solidus Labs, an New York-based provider of crypto-native market surveillance and risk monitoring solutions.

Related: Michael Saylor Defends MicroStrategy’s Aggressive Bitcoin Buys

On that note, Gensler referenced his tenure as CFTC Chair, and in particular his “decisive action to increase transparency and reduce risk in the $400 trillion swaps market.”

While history is not an indicator of future performance, it’s wise to use the past to help inform our future expectations. So the crypto industry should educate itself on Gensler’s actions and priorities while leading the CFTC to better understand how he might approach crypto (should he be confirmed as the next SEC chairman).

There are clear parallels between current crypto markets and the historical derivatives markets Gensler addressed during his time as  CFTC chair. In a recent NPR interview Salman Banaei – a lawyer and economist who previously worked under Gensler at the CFTC on market surveillance – noted that “before Gensler came in, there wasn’t much active surveillance of what traders were doing during the trading day.” 

The CFTC, he says, would often wait until a complaint was filed and react to that. But with Gensler, Banaei says, that changed.

Related: Litecoin Creator Charlie Lee a ‘Big Fan of Dogecoin’

See also: How SEC Chair Gary Gensler Could Differ From Predecessor Jay Clayton

Creating a holistic trade surveillance program, as opposed to launching investigations based on anecdotal reports or incidents, led to a number of investigations and settlements, according to Banaei. In other words, proactively surveilling market data immediately advanced market integrity.

Source: Yahoo Finance

One Response
  1. August 4, 2021

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