Congressman Requests an Investigation into Gensler and the SEC’s Role in the FTX Crash
Rep. Ritchie Torres (D-NY) said that Gensler was “entirely responsible” for failing to avert the destruction of FTX.
A Democratic congressman is requesting an independent probe into the failure of the Securities and Exchange Commission to prevent the historic collapse of the cryptocurrency exchange FTX.
Representative Ritchie Torres (D-NY) demanded in a sharply worded letter written on Tuesday that the Government Accountability Office (GAO) undertake an independent examination of the SEC’s activities — or lack thereof — in the months preceding FTX’s collapse last month.
The letter singled out SEC chairman Gary Gensler for claiming sole regulatory authority over cryptocurrency exchanges while failing to oversee them effectively.
“If the SEC has the power Mr Gensler says, why did Mr Gensler fail to find the greatest crypto Ponzi scam in the history of the United States?”
The letter did not mince words in asserting that Gensler is “solely accountable for the regulatory shortcomings underlying FTX’s demise.”
Torres then attacked Gensler’s character and objectives, questioning his choice to probe Kim Kardashian instead of cryptocurrency exchanges such as FTX.
In October, Kardashian was fined $1.26 million by the SEC for advertising EthereumMax, a cryptocurrency that the agency deemed to be unregistered securities. On the day of the charge, the SEC released a flashy video featuring Gensler to raise the notice of the case, a strategy that is rare in the generally dry field of securities regulation.
“The SEC’s guiding premise must be the protection of the investing public, not the promotion of the political appointee in charge,” Torres wrote on Tuesday.
The letter also refers to disagreement inside the SEC’s own ranks, claiming that Gensler’s actions have induced rebellion among his employees.
“Mr. The SEC Inspector General reported the greatest attrition rate in a decade as a result of Gensler’s leadership,” wrote Torres.
SEC Commissioner Hester Peirce, one of Gensler’s colleagues, recently told Decrypt that Gensler’s approach is “not a smart manner of regulating” and that many individuals had “lost up on us.”