SEC Chair Gary Gensler Warned About Subpoena For Avoiding Transparency About FTX

Key Points:

• Congressman McHenry warns SEC Chair Gary Gensler of a possible subpoena over transparency issues with FTX.
• SEC emphasizes the need for crypto registration, but compliance remains extremely low.
• Gensler hints at parallels between Binance and FTX, raising concerns, while McHenry criticizes the SEC’s response.

US Congressman Patrick McHenry has raised concerns over the transparency of the Securities and Exchange Commission (SEC) and its Chair, Gary Gensler, regarding their interactions with prominent cryptocurrency exchange FTX and its founder, Sam Bankman-Fried.

SEC Chair Gary Gensler Raises Alarm on Unregistered Cryptos

McHenry, who chairs the House Financial Services Committee, expressed his dissatisfaction with the SEC’s response to regulatory requests and hinted at the possibility of a subpoena.

In recent years, the SEC has consistently maintained that most digital coins should be registered with the government, similar to stocks and bonds. However, out of approximately 10,000 crypto tokens in existence, fewer than 10 have complied with this requirement, leading to concerns about unregulated crypto products.

Moreover, major cryptocurrency exchanges, including FTX, have not registered with the SEC, and the regulatory agency has refrained from taking legal action to enforce such registration. This lack of enforcement has allowed countless crypto entrepreneurs to promote their products without disclosing crucial information, such as associated risks and the identities of those involved.

SEC Chair Gary Gensler drew attention to potential parallels between Binance and FTX, specifically their alleged use of affiliated entities for fund transfers. Gensler highlighted FTX’s alleged involvement in fraudulent activities and market manipulation through its sister firm, Alameda Research, led by Sam Bankman-Fried.

Congressman McHenry Threatens Subpoena Amid Crypto Transparency Concerns

Congressman McHenry criticized Gensler’s response to these concerns, stating:

“You’ve done nothing to remedy legitimate and bipartisan concerns. That is disgraceful…our patience is wearing thin.”

McHenry issued a stern warning to Gensler, suggesting that if he continues to ignore regulatory requests, he could face a congressional subpoena, emphasizing:

“You do not want to be the first SEC chair to receive a congressional subpoena.”

This escalating tension between Congress and the SEC Chair Gary Gensler underscores the growing need for transparency and regulatory oversight in the rapidly evolving cryptocurrency space.

Coincu will continue to update the situation related to Sam Bankman-Fried, you can find out more information through this article.

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