Gary Gensler's SEC Leaves Legacy of Controversial Crackdowns on Crypto as He Prepares to Step Down

It's a great privilege to be in a role like this. I'm the 33rd chair. It's a big country, a lot of people could do this job, so I really start with it's just such a privilege to be here. And thank you to Joe Biden for asking me to do it. But what's remarkable about this role is it oversees the $120 trillion capital market, which touches everything in our economy, because you've got to raise money for most of what we do in our economy and people save. So I feel terrific. And you ask about the attacks and things like that—that's what public policy is about. You walk into this central square and you debate these important things for 330 million Americans. I've worked over the years with Hillary Clinton on a number of campaigns, and I remember Hillary saying once, if you're not willing to be attacked, you can't go into the public square and debate policy. And so I think it's part of our great democracy.

Well, I think it does change. What we do here at this great agency is look out for everyday Americans, people just trying to save for a better future, and try to move through things that help them, like we've done—like even shortening the settlement cycle from two days to one day. It might sound geeky behind the scenes, but it means you get your money one day faster, for instance. Or getting privacy notices—there was no federal rule that you needed to get a notice if your data was hacked, and we put in place some rules to do that. So we're looking out for everyday Americans, trying to lower the cost of the markets to trade stocks, to trade bonds. But it doesn't surprise me that then there's some in the middle of the market—they're called brokers, they're called dealers, they're called intermediaries, stock exchanges—who they like their business model. And if we're changing the rules to benefit everyday Americans, they might have thoughts on that and object. And that's part of the process, but our clients are ultimately people at their kitchen tables.

My daughters, if they ever watch this interview, ask where your spurs, Dad. I think that we've done some good things. Look, I came in—my predecessor Jay Clayton, who was in this office, had also tried to address this new emerging part of finance. And as you say, it's less than 1% of our overall financial markets. But it was then when Jay was trying to address it, and he brought 80 enforcement actions in this area. We've brought about a hundred in our four years. It's consistent—it's maybe about 5% of what we do in our law enforcement. That means there's 95%, unfortunately, about other things—you know, scammers and fraudsters and so forth. But in this field, it's rife with bad actors. And let me just split the field into two just for a minute. The public knows a lot about Bitcoin, which is, depending upon its market value on any given day, two-thirds to 80% of the market value of crypto. And then there's everything else—or some people say Bitcoin and Ethereum and everything else—these 10,000 to 15,000 projects. They're raising money from the public, and the public's investing, hoping for a better future.

I've been around finance for over four decades, and everything in the markets trades on a mixture of fundamentals and sentiment at any given time. But I've never seen a field that's so much wrapped up in sentiment and not so much about fundamentals. And these 10,000 to 15,000 projects—many of them will not survive. They're like venture capital investments, they're not going to survive. But there are also a fair number of small pump-and-dump schemes and other things in this. And of course we've lived through a few years where they became notorious—but they're in jail: the Sam Bankman-Frieds and the CZs and the Do Kwons, where tens of billions of dollars were lost by investors.